FOLLOWING a competitive auction, French National Railways (SNCF) has entered exclusive negotiations with a consortium of Canadian pension fund Caisse de Dépôt et Placement du Québec (CDPQ) and a fund managed by DWS Group for the possible sale of Ermewa Holding and its subsidiaries.

The offer is thought to be in the region of €3bn. CDPQ and DWS would hold equal shares in Ermewa upon completion of the transaction.

The Ermewa Group is Europe’s second largest freight wagon and tank container leasing company with a fleet of 100,000 wagons and 1200 employees. Ermewa reported a turnover of €489m and an Ebitda of €271m in 2020. The company’s headquarters is in France and it has 40 offices internationally.

The sale has been flagged for several years but has been brought forward by the parlous state of SNCF’s finances, with the railway reporting a loss of €3bn in 2020 after it was heavily hit by Covid-19 and strikes in the early weeks of the year. SNCF instructed Lazard to initiate the process of selling the business in October.

The railway’s net debt did fall from €60.3bn in 2019 to €28.1bn in 2020 although SNCF is believed to be considering the sale of other assets, including a stake in its logistics subsidiary Geodis, which had a turnover of €8.3bn in 2020.