Brexit Scraps More IPOs as Deutsche Bahn Won’t Float Units
(Bloomberg) -- German rail operator Deutsche Bahn AG shelved plans to list its U.K. bus and rail unit Arriva and logistics service provider DB Schenker, saying Britain's vote to leave the European Union derailed its markets.
“Unfortunately, the world has fundamentally changed since Brexit,” Chief Executive Officer Ruediger Grube said in an interview with Dpa-AFX. A spokesman for the company confirmed the comments. “We'd be throwing money out of the window” if the sale were to go ahead, Grube added.
That adds to a list of European deals put on hold in the wake of the June 23 referendum. Last week financial-software maker Misys Ltd. canceled its planned offering and Telefonica SA's O2 said it's postponing a potential listing of the U.K. mobile-phone unit.
The pound's fall since the Brexit vote has hurt investor appetite for European initial public offerings. Uncertainty over the conditions of the U.K.'s EU exit, thrown into turmoil by a court ruling Thursday, has further undermined demand.
Deutsche Bahn bought Arriva Plc, at the time the biggest public transport company in Europe not in national hands, for 2.4 billion pounds ($3 billion) including debt in 2010, and subsequently delisted the shares. Arriva has more than 60,000 employees and the deal was Deutsche Bahn's largest acquisition.
DB Schenker, which Deutsche Bahn added in 2002, is Europe's largest road transport company. It's also among the top three forwarders of ocean and air freight, and has 66,000 employees. The railway operator in July cut its revenue forecast for the unit.
The move to scrap the Arriva and Schenker IPOs is the latest setback for Deutsche Bahn's efforts to raise funds through flotations, which have faced political opposition in Berlin since the idea was introduced. After the carrier swung to a 1.3 billion-euro ($1.44 billion) net loss in 2015, the railway's supervisory board asked management to come up with a plan for bringing in outside investors.
To contact the reporter on this story: Richard Weiss in Frankfurt at rweiss5@bloomberg.net. To contact the editors responsible for this story: Chris Reiter at creiter2@bloomberg.net, Eric Pfanner, Tom Lavell
-
Navigating Friction And Energy Realities: An Analysis Of Marco Rubio's October Visit To India
Occurring at a critical juncture marked by stalled trade negotiations and escalating geopolitical pressures over global energy supplies, the visit offers a profound window into modern US-India relations.
-
India Exports Capital. Why Not Export Trusteeship?
The big question, then, is whether India can build an institution that global borrowers, investors, banks, and lawyers can trust, even without an Indian connection.
-
France's Economy & Politics Are In Crisis | The Reason Why
Let's look at how the French economy and politics evolved under Nicolas Sarkozy, Franois Hollande and Emmanuel Macron.
-
You May Inherit The Business. You Must Earn Its Credibility.
Succession tests the founder's ability to share authority as much as it tests the next generation's readiness to assume it.
-
Signing Deals Is One Thing; Making Them Work Is Another | The Week In Whys
Sometimes, things don't turn out as planned. Indian companies have lost some bids to rivals, some projects won't produce until 2030.
-
FOMC Wall, PERM Suspension, Hospital Stocks | Talking Points This Week
A PERM suspension would directly affect green-card sponsorship rather than H-1B visas, so the near-term earnings impact could remain relatively limited. The key question is whether this marks a new phase in US scrutiny of Indian IT.
-
Everything, Everywhere, All At Once: Dalal Street's Week To Forget | Joining The Dots
Visa curbs, a Starlink spat and cancer drug caps: what connects this week's shocks for Indian markets
-
India Is Going Abroad For Critical Minerals. But It May Take Years To Pay Off | The Reason Why
Although India's steps are in the right direction, they remain modest compared with India's growing dependence.
-
When Everyone Has AI, What Gives You An Edge?
India's young workforce is entering an uncertain world of work where powerful AI tools are becoming widely accessible. The advantage will belong to those who combine deep expertise with digital fluency, and the distinctly human capabilities that technology cannot manufacture.
-
Wrong Labels, High Pesticide Residues Holding Back Agri Exports | The Reason Why
India needs stronger domestic food-safety and labelling standards, with best practices becoming part of everyday business for farmers, traders and food companies.
