Arriva agrees to £1.59bn takeover deal
THE GERMAN company that runs the Metro today agreed a £1.59bn deal to take over Sunderland public transport company Arriva in a move that will create a multi-billion pound European public transport colossus.
Arriva, which runs bus and rail services across the Continent, agreed to the 775p a share deal which will make it a wholly-owned subsidiary of German group Deutsche Bahn.
Arriva chairman Sir Richard Broadbent, said: “The management team and employees have succeeded in building Arriva into a leading independent European passenger transport business with a presence in 12 countries.
“Deutsche Bahn also recognises the opportunity there is in Europe and wants to build on our existing presence and skills to further develop these markets. This offer fully reflects the value of the business we have built.”
The Wearside company’s reach across Europe made it hugely attractive to other public transport groups eager to take advantage of the opening up of more state-run bus and train services on the Continent to the private sector.
The size of its European bus and train interests have trebled in the last six years and profits from its operations there rose by 7% to £83.9m last year.
Arriva, which employs more than 44,000 staff, made a £121.7m profit last year and had a £3,147.8m turnover. It reckons the European bus and rail market is worth more than £200bn.
Deutsche Bahn chief executive, Dr Rüdiger Grube, said: “Arriva’s activities will strengthen Deutsche Bahn’s strategic positioning in Europe, principally through Arriva’s successful targeting of Europe’s increasingly liberalised and fast growing transport markets which are of strategic interest to Deutsche Bahn.
“Arriva will give Deutsche Bahn the platform to expand in Europe and enhance its position as one of Europe’s leading passenger transport groups.”
Deutsche Bahn's board agreed the offer yesterday as it tried to speed up the deal in case French public transport group SNCF came in with a counterbid.
Arriva, which operates the CrossCountry rail franchise and Arriva Trains Wales in the UK, held talks with SNCF subsidiary Keolis earlier in the year but those negotiations broke down without agreement.
Deutsche Bahn, which took over operation of the Tyne & Wear Metro on April 1, already owns English, Welsh and Scottish Railway, Britain’s biggest rail freight company, and operates the British Royal Train, Chiltern Railways and London Overground in the UK.
It has a turnover of £30.3bn, operates in 150 countries and employs more than 240,000 people.