Arriva, soon no longer "a DB company"

Deutsche Bahn sells Arriva to US-based investor

Arriva, soon no longer "a DB company", as is seen on this train in Czech Republic

German state-owned railway company Deutsche Bahn is selling Arriva group, active in passenger transport in 10 countries across Europe, to the global investment fund I Squared Capital. The transaction is expected to close in 2024, DB announced on Thursday.

Originally a British company, taken over by Deutsche Bahn in 2010, Arriva will now go to the hands of a Miami-based investor with a global presence. According to DB, the sale will enable additional growth in rail transport in Germany and more investments in their core business.

Arriva Group says it welcomes the decision of DB, saying I Squared has “a track record of successful investments in infrastructure companies – from energy solutions companies such as Aggreko, through to transport and logistics services companies including TIP Group”. I Squared currently manages around 38 billion euros worth of investments in infrastructure projects in over 50 countries, founder and Chairman of the company Sadek Wahba said to CNBC. While it does have infrastructure companies in its portfolio, Arriva would be the first public transport operator I Squared would own.

The activities of Arriva are divided into four lines of business: UK Bus, UK Trains, The Netherlands and Mainland Europe. Arriva has operations in the Czech Republic, Croatia, Hungary, Italy, the Netherlands, Poland, Slovakia, Slovenia, Spain and the United Kingdom. For example, it runs the iconic red buses in London, but also blue regional trains in the north of the Netherlands. Before the transaction can be closed, it is subject to customary closing conditions, including the approval of the DB Supervisory Board and the Federal Ministry of Digital and Transport of the Federal Republic of Germany.

Concerns among Dutch unions and provinces

The Netherlands is one of the countries where Arriva is active in local transport. Dutch union FNV Spoor says it is concerned about the upcoming sale of Arriva to the investment firm, reported sister publication SpoorPro. Now that the deal has been finalised, several provinces also let it be known that they view the takeover with suspicion. Political parties have asked questions in multiple provinces about what the sale of Arriva means for transport in their province. The parties are concerned about the quality of bus and train transport by Arriva if it is acquired by US investor I Squared Capital.

The questions were asked before it was revealed on Thursday that Deutsche Bahn is really selling Arriva. There are also concerns among PvdA and SP that I Squared Capital mainly wants to make a profit, while some parties see public transport as a public facility. They want to know whether the province has had contact with Deutsche Bahn, the selling party, and whether there is contact with the other provinces.

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Author: Esther Geerts

Former Editor RailTech.com

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