Deutsche Bahn AG, the German state-owned railway operator and infrastructure owner, the largest in Europe, is close to making a £1.6 billion bid for the UK train and bus operator Arriva.

The Sunday Times reported yesterday that Deutsche Bahn is close to finalising a £1.6 billion bid for Arriva, one of the largest bus and rail operators in the UK.

The paper said that Deutsche Bahn had approached Arriva last month and has since been in detailed talks and an agreed takeover is expected inside a fortnight.

Deutsche Bahn is said to have conducted extensive due diligence, and is expected to make an offer of between 750 and 775 pence a share, valuing Arriva in the vicinity of £1.6 billion.

This will be the second time that European transport operators have shown an interest in Arriva this year.

In January, Paris, France-based SNCF, the country biggest rail operator had announced it was in talks with Arriva, but the talks soon broke down and Deutsche Bahn has been since holding talks and conducting due diligence.

Berlin-based Deutsche Bahn with 2009 revenues of £26 billion was formed in 1994 through the merger of the Deutsche Bundesbahn  of West Germany and the Deutsche Reichsbahn of East Germany .

It is one of the world's leading passenger and logistics companies having operations in 130 countries.

With some 2,20,000 employees, Deutsche Bahn operates more than 31,000 train runs daily on its 34,000km-long, modern rail network ferrying more than 5 million passengers each day.

Arriva, employing more than 44,000 people and 2008 revenues of £3 billion, is one of the largest passenger transport company in Europe. With Arriva Trains Wales and CrossCountry, Arriva is a leading UK rail operator.

It is one of the largest bus operators in London, and the largest private bus operator in Italy and Denmark and has significant presence in 12 European countries.