GermanyÔÇÖs state-owned Deutsche Bahn is poised to offer around ┬ú1.6 billion for UK transport company Arriva.
Deutsche BahnÔÇÖs board will meet this week to approve the bid for the UKÔÇÖs third-largest transport companyÔÇöwhich had refused to open its books until the German company raised its initial offer, which valued Arriva at ┬ú1.2 billion.
Arriva, which is based in Sunderland, operates in large cities and runs train networks including CrossCountry and Arriva Trains Wales. The CrossCountry network covers 1,400 miles and calls at more than 100 stations between Aberdeen and Penzance, Bournemouth and Manchester and Cardiff and Stansted.
Arriva also runs bus services in cities such as Liverpool, Leeds, Glasgow and Newcastle, as well as operating services in 12 European countries.
Last month Arriva reported pre-tax profits of £122 million, down 19 per cent from the previous year, with revenues of £3.3 billion.
It is the only large UK transport group to have ventured into Europe, where it has taken advantage of gradual liberalisation. Its European business now accounts for half of its turnover.
The other big four UK bus and train operators have largely avoided European markets in favour of buying North American bus operations.
Deutsche Bahn is EuropeÔÇÖs biggest railway operator, employing around 239,000 people. It already owns the UKÔÇÖs Chiltern Railways, and in 2007 bought UK freight company EWS, which runs the Royal Train, rebranding it DB Schenker. It is also joint operator of the London Overground service.
Arriva is Deutsche BahnÔÇÖs biggest rival in the German domestic passenger market.
SNCF, the state-owned French operator, also considered bidding for Arriva, having previously held talks with the UK company over combining it with Keolis, the private operator of the trams and buses it controls, in return for an equity stake. However, it is believed the French company abandoned plans to bid as it was unable to outbid Deutsche Bahn.
Deutsche Bahn announced its interest in Arriva in March, two weeks after talks with SNCF broke down.
The takeover would be Deutsche Bahn's biggest so far of a public transport operator outside Germany.
It is possible however that the deal could face opposition, due to Arriva's already strong position in continental Europe.
