SCHUFA Holding AG 1 billion euros too expensive in bidding war?

The German Federal Cartel Office has approved the takeover plans of both the Swedish EQT Group and Team-Bank, which is part of the DZ Bank Group. Of course, the Bundeskartellamt only examines competition law aspects of such a transaction. Data protection aspects are usually left out of the equation.

As the largest provider of SCHUFA information requests and an industry expert, selbstauskunft.de is watching the proceedings with great interest. The value of SCHUFA Holding AG is currently estimated at around 2 billion euros. However, there are several different procedures with which the value of a company can be determined. Often, the annual profit or annual turnover is multiplied by a factor customary in the industry to arrive at a result. All parties involved are usually aware that these are approximate values. So far, no problem. No problem? Even though forecast data on the future development of the company are of course taken into account, relevant aspects are missing from the discussion:

Aspect 1: Data quality. According to studies, SCHUFA handles up to 50% incorrect or outdated data. But since data is SCHUFA's core business, the question naturally arises: what can a data trader be worth if half of its assets are wrong? Possibly 50% less than estimated?

Aspect 2: Trust. According to a representative study conducted by selbstauskunft.de in 2021, 60% of the population has little or no confidence in SCHUFA. In many cases, this distrust results from personal experience with incorrect or outdated entries. Here, too, the question arises: A company with a monopoly position that is valued at 2 billion euros, is the immense trust problem already priced in? Or should a substantial discount be calculated here in the valuation?

Now you say: there's nothing left at all? That would not be economically correct, of course. After all, SCHUFA is a company that makes a hefty profit year after year. But nevertheless the question remains open, whether these two main sufferings of the SCHUFA are sufficiently considered with the fixing of the gigantic value of 2 billion euro. Here with selbstauskunft.de one assumes that this is not so. A value definition of an enterprise is finally always also an anticipated profit prognosis. And whether in a time, in which consumers become ever more critical in handling your data and also question whether an enterprise acts in their interest, an enterprise, which is led after landlord kind, feels obligated to say the least rather to the interests of the attached banks than those of the final consumers, thus whether there the profits will gush also in the long term still in such a way, is at least questioned.

This is probably also the reason why the Swedish EQT Group is planning to go into the project with a 3-digit million budget for renovation work. And so it's a bit like when we want to buy a house: the brokerage fees come on top of the purchase price, the roof has to be done and the basement sealed. A new heating system is also due and the floors have to be taken out and redone anyway. Often the question arises whether, in view of all the deficiencies, it would not be better to build a new house - especially if a good part of the renovation budget could be used to get the old tenant, or in this case the board of directors, out of the house.

Image Source: Adobe Stock, Shocked business man looking through papers with bills, By pathdoc, FILE NO : 212766734