Deutsche Bahn prepares Arriva for IPO
Deutsche Bahn is considering to launch an initial public offering (IPO) of its multinational transport subsidiary Arriva. The company’s minority stake might well be sold next year. Afterwards, DB plans to put the remaining shares on the market within three years.
After several months of uncertainties and rumours, Deutsche Bahn (DB) has proved its definite intention to sell Arriva via an IPO scheme. This was reported on Wednesday, 4th December, by German news agency Deutsche Presse-Agentur (dpa) with a reference to the statement of DB’s CEO Richard Lutz. The company’s spokesperson confirmed the report but do not provide any details to the media. According to the dpa’s report, the IPO of Arriva could be launched in May 2020.
However, a potential location for listing is still unknown. It is worth to note that IPO is quite possible to be carried out in Amsterdam. In August of this year, the US-based agency Bloomberg reported that the Euronext Amsterdam exchange was chosen by DB for selling shares of Arriva. “Deutsche Bahn is preparing the IPO as an alternative if a sale process … doesn’t achieve a high enough valuation,” Bloomberg stated in its report based on the information of people familiar with the matter. In November there were some news items about the possible selling of Arriva to a new owner as well as negotiations between DB and potential investors. Later, dpa reported that the German railway company abandoned the plan. As a result, IPO remains a single scenario.
Arriva & DB
Arriva was incorporated in 1938 as T Cowie in the United Kingdom. The company got its current name in 1997 after a series of mergers and acquisitions. Deutsche Bahn purchased Arriva in 2010. In March of this year, the German railway company announced plans to sell Arriva in order to help pay off debt amid rising pressure to invest in infrastructure and trains in Germany. The book value of Arriva is 2.2 billion euros.
As a public transport company, Arriva has a staff of 53,000 people and provides bus, train, tram, waterbus, bike-sharing services in 14 European countries. The company operates 17,000 buses and 1,100 trains (including trams). As for the rail links, the Arriva’s trains run in eight countries: the UK, the Netherlands, Denmark, Sweden, Portugal, Czechia, Slovakia and Poland. The company’s network in the Netherlands consists of bus lines in 10 provinces and train links in five provinces (Groningen, Friesland, Overijssel, Gelderland and Limburg).