Germany’s Deutsche Bahn to acquire UK’s Arriva for £1.59 billion

Deutsche Bahn AG, the German state-owned railway infrastructure owner and operator, the largest in Europe, is to acquire UK train and bus operator Arriva for £1.59 billion to create one of Europe's biggest rail and bus transport company.

Berlin-based Deutsche Bahn, with 2009 revenues of £26 billion, is one of the world's leading passenger and logistics companies having operations in 130 countries and operates the Chiltern Railways and rail freight services in the UK.

Deutsche Bahn will pay 775 pence per share to Arriva, a 34 per cent premium and the board of the Sunderland-based Arriva's has accepted the offer, with shareholders of the company also getting an 18 pence dividend.

The impending acquisition that was reported by the media last week, (See: Germany's Deutsche Bahn may snap up UK's Arriva for £1.6 billion)  was a culmination of a month of detailed talks and extensive due diligence conducted by Deutsche Bahn.

Deutsche Bahn hopes to strengthen its market position in Europe significantly with the acquisition as competition in Germany and across Europe continues to intensify due to European government strategy of liberalising the transport industry.

Dr. Rüdiger Grube, chief executive of Deutsche Bahn said, ''Arriva is a very successful, commercial transport provider in Europe as well as in the UK. Arriva offers us excellent opportunities. Without this acquisition, we would need many years to gain a competitive edge like this.''