Arriva agrees to takeover by Deutsche Bahn

Arriva is the UK's third biggest transport group

UK train and bus operator Arriva has agreed to be taken over by Germany's Deutsche Bahn in a deal worth £1.59bn.

The deal is set to create one of Europe's biggest rail and bus transport groups.

Deutsche Bahn runs Germany's national rail services, as well as Chiltern Railways and rail freight services in the UK.

Arriva runs rail and bus services in 12 European countries, including Arriva Trains Wales in the UK.

Deutsche Bahn's chief executive Rudiger Grube said he expected the deal to help his company expand further in Europe, targeting Europe's "increasingly liberalised and fast-growing transport markets" which he said were "of strategic interest to Deutsche Bahn".

Consolidation plans

The German operator is keen to expand beyond its domestic market, where it faces increased competition.

Arriva's chairman Sir Richard Broadbent said the £1.59bn price tag "fully reflects the value of the business".

Shareholders will now be asked to give their approval for the deal.

A takeover of the Sunderland-based company has been on the cards for months amid a trend towards consolidation of the European transport industry.

Arriva's agreement with Deutsche Bahn follows talks earlier this year with France's train operator SNCF, which ultimately broke down.

Deutsche Bahn's Mr Grube said he expected the newly merged group to eventually be one of the few leading transport companies operating in Europe.