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The Abu Dhabi Investment Authority (Adia) continues to make headway with overseas acquisitions, finalizing its bid alongside CVC for DB Schenker and potentially backing French buyout firm PAI Partners’ bid for Sanofi’s consumer health unit.
#1- CVC and competing DSV offer matching EUR 14 bn bids to snag DB Schenker: A consortium comprising CVC Capital Partners, Adia, and Singapore’s GIC, submitted a EUR 14 bn bids to acquire DB Schenker, the logistics subsidiary of Germany’s Deutsche Bahn, alongside competing bidder Danish transport company DSV, Bloomberg reports, citing sources familiar with the matter.
We knew this was coming: Bloomberg reported earlier that the two parties were expected to offer their final bids in August after Deutsche Bahn shortlisted them following shipping giant Maersk’s withdrawal from the race.
Background: CVC formed the consortium with Adia and GIC in May. Deutsche Bahn — which kicked off the sale process in December — is expected to close the transaction in 2025.
The CVC consortium has more to offer: The private equity firm separately submitted another option for the German government to reinvest in the logistics firm for a 25% stake, potentially taking the value of the bid to EUR 16 bn, according to the sources. The Adia-backed consortium intends to list DB Schenker on the Frankfurt Stock Exchange, Reuters reports, citing people in the know. CVC has also pledged to keep the company’s headquarters in Germany and preserve the DB Schenker brand. In contrast, a competing bid from DSV could lead to potential layoffs and the closure of some locations, sources said.
What’s next? Deutsche Bahn is currently reviewing the offers and will discuss CVC’s offer with the German government, with a decision expected in the coming weeks. The railway company and the government are likely to renegotiate the terms of the final bids with the two consortiums, a source told Bloomberg. “The most important criterion remains that a sale must be economically advantageous for the railway,” a spokesperson for Deutsche Bahn told Reuters.
This would not the first acquisition by CVC and Adia this year: A consortium comprising Abu Dhabi Investment Authority’s (Adia) subsidiary Platinum Ivy, private equity firm CVC Capital, and Sweden’s Nordic Capital acquired 100% of UK Hargreaves Lansdown for GBP 5.4 bn after the investment firm accepted the consortium’s final formal offer earlier this month.
The story also got ink in the Wall Street Journal
#2- PAI taps Adia to back its Sanofi bid: French buyout firm PAI Partners is in talks with Adia and Singapore’s GIC to get their backing for its bid to acquire Sanofi’s consumer health unit, Bloomberg reports, citing sources familiar with the matter. PAI is currently competing with US-based firm Clayton Dubilier & Rice, which is set to submit a binding offer ahead of a deadline in September.
Potential transactions could value Sanofi’s unit at up to EUR 15 bn. However, since negotiations are ongoing, the bidders and supporting consortiums may still change. The transaction is expected as early as 4Q 2024.
REFRESHER- This is not the first time a bidder targets Adia for support for the French firm: The Emirati sovereign wealth fund was approached by US-based private equity firm Advent International in July to back its bid for Sanofi’s consumer health unit. The initial offers by Advent and other bidders were expected by mid-July, though there’s been no word on a final bid from the company or on the conclusion of negotiations with Adia.
Sanofi is “keeping all options open” and could still potentially opt to IPO the unit, as it is concurrently preparing for the share float, according to sources familiar with the matter. The French pharma giant is aiming to reach a decision in the coming month.
Sanofi won’t exit the unit post-sale: Sanofi is expected to retain a minority stake in its consumer health division, which would reduce the capital commitment required from the bidders, sources told Bloomberg.
REMEMBER- Another Adia + PAI transaction is in the works: The sovereign wealth fund is mulling investing at least EUR 1 bn in Froneri, PAI’s ice cream JV with Nestlé, which owns brands including Haagen-Dazs. The investment would potentially value Froneri at over USD 10 bn, with PAI looking to retain its 50% stake in Froneri for longer, as it seeks new investors for a continuation fund, which could also see it sell a minority stake to a long-term investor.
