Private investors will be able to invest in up to 24.9 percent of the rail unit involved in freight and passenger traffic, heads of the conservative Christian Democrats (CDU), their Bavarian sister party the Christian Socialists (CSU) and the centre-left Social Democrats (SPD) decided in a closed-door meeting of party leadership.
Partial privatization could raise up to €8 billion ($12.5 billion), Transport Minister Wolfgang Tiefensee told Deutschlandfunk radio on Tuesday. Tiefensee said stock could be offered before the end of the year.
“I am certain the investors will come,” Tiefensee said, calling Bahn shares “secure investments that that will provide for long-term growth.”
Deutsche Bahn's 34,000 kilometre (21,127 miles) network of tracks, train stations and energy supplies will remain in public ownership, party leaders decided.
The plan follows one the SPD party leadership approved on April 21.
Two-thirds of the capital raised by privatization will be invested back into the Bahn, SPD chairman Kurt Beck said on Monday.
But Beck promised that 24.9 percent would be the ceiling for private ownership, calling it the “end point of privatization”.
“We will stick to this clear declaration,” Beck said.
CDU parliamentary group leader Volker Kauder said when the SPD approved its plan last week that the 24.9-percent figure was "an initial step" and that to allow up to 49 percent private investment would be more appropriate.
Kauder said Monday's agreement opened the way for a “Bahn with a future.”
The agreement now must go to the lower house of parliament before the summer break. It also needs approval from Germany's 16 states, several of which fear the closure of stations and smaller lines as part of any overhaul.