GERMAN Rail (DB) has signed an agreement to sell its entire Arriva contract operating business to I Squared Capital, a US-based independent global infrastructure investment manager with over $US 37bn of assets in North America, Europe, Asia and Latin America.
The transaction, which includes all operating businesses across Arriva’s 10 markets in Europe, is expected to complete in 2024. This is subject to customary closing conditions including the approval of the DB supervisory board and Germany’s Federal Ministry for Digital Affairs and Transport (BMDV).
The value of the transaction has not been disclosed.
DB says that disposing of Arriva forms part of its Strong Rail Group strategy to focus resources on its core domestic business and “enable additional growth in rail transport in Germany.”
British company Arriva was acquired by DB in 2010. In recent years DB says that it has worked successfully to stabilise the Arriva business after the Covid-19 pandemic, focusing its sustainable growth strategy on relevant markets.
The sale of Arriva businesses in non-core markets, including Sweden, Portugal, Serbia, Denmark and bus operations in Poland, was completed this year.
Arriva’s rail portfolio includes its UK Trains and Netherland businesses, as well as regional operating contracts in the Czech Republic that form part of its Mainland Europe business.
“Arriva has good prospects for sustainable growth as market liberalisation in Europe progresses,” says DB CFO, Dr Levin Holle.
“The strategic goal of DB is to make record-level investments in environmentally-friendly rail in our core business, combined with the massive increase of investment by the German federal government in our German rail infrastructure.
“The purchase agreement signed today is therefore in the spirit of Strong Rail. At the same time, the sale to I Squared will give Arriva new options to support its growth potential.”
“Arriva’s strategy for net-zero operations and the decarbonisation of its fleet aligns with our strategy to develop and scale assets with technologies that accelerate the energy transition,” says Mr Gautam Bhandari, global CIO and managing partner at I Squared Capital.
“We are excited to work with Arriva and we will invest to support its future growth as a major European bus and rail operator.”
“I Squared has an established track record of supporting companies which provide essential services, and of investing in the energy transition,” says Arriva Group CEO, Mr Mike Cooper.
“We are delighted that they have committed to provide Arriva with long-term capital for investment in innovation across our services, our assets and our people.”
