By Emma-Victoria Farr
FRANKFURT (Reuters) -German rail operator Deutsche Bahn has selected Goldman Sachs (NYSE:GS), Morgan Stanley (NYSE:MS) and Deutsche Bank (ETR:DBKGn) to run a sale of its logistics arm for up to 20 billion euros ($21.1 billion), sources familiar with the matter told Reuters.
Final details on the sale of the unit Schenker are being decided and the mandates have yet to be formally signed off, the sources said, speaking on condition of anonymity because the matter is not yet public.
Deutsche Bahn and the banks will meet in Berlin at the end of this week, one of the sources said.
A spokesperson for Deutsche Bank confirmed the German lender has been given an advisory role without giving further details.
Deutsche Bahn, Goldman Sachs and Morgan Stanley declined to comment.
The process will not start before the third quarter of this year, as previously reported. Bloomberg first reported on Tuesday that Goldman Sachs and Morgan Stanley had been selected to advise on the sale. Any cash generated would help the German state-owned rail business to cut debt and invest in the infrastructure of its railway network. An IPO of the division has also been discussed and the process is likely to be dual track, two other sources said.
Trade players such as Danish transport firm DSV, Deutsche Post (ETR:DPWGn)'s DHL and French logistics business CMA CGN could have an advantage over financial sponsors in volatile debt financing markets if they choose to bid all equity, one of the sources said. CVC, Carlyle, Advent, Bain and Blackstone (NYSE:BX) reportedly spent time last year looking at Schenker. These bidders may choose to team up on a bid to finance a deal. German unions will play an important role in a potential deal, possibly favouring private equity bidders on the basis that they are likely to create jobs rather than cut them, one source said.
($1 = 0.9473 euros)