Deutsche Bahn set to buy Arriva

GERMAN transport operator Deutsche Bahn is understood to be on the verge of agreeing a £1.6 billion takeover of UK bus and trains firm Arriva.

It is believed that Deutsche Bahn's board is meeting this week to approve the bid with an announcement expected in the next two weeks.

The state-owned German company – which already operates UK services such as the Chiltern Railways route between London and Birmingham Snow Hill – first confirmed interest in Arriva last month.

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The company has been working on detailed due diligence for the past month and could make an offer of between 750p and 775p a share, according to a Sunday paper.

The acquisition of Arriva, which is the UK's third-biggest transport firm, would create a European travel giant.

Arriva also attracted takeover interest from France's SNCF earlier this year as European operators look to consolidate to take advantage of deregulated transport markets.

Arriva runs two rail franchises in the UK including CrossCountry, which covers 1,400 miles and calls at more than 100 stations between Aberdeen and Penzance, Bournemouth and Manchester and Cardiff and Stansted.

It also runs bus services in major cities such as Glasgow, Liverpool, Leeds, Leicester and Newcastle as well as operating services in 12 European countries.

Arriva declined to comment, while nobody from Deutsche Bahn could be reached for comment yesterday.