Agreement has been reached for the sale of Arriva Group to I Squared Capital by current owner Deutsche Bahn (DB). Completion is expected during 2024, subject to conditions and approvals, and a firm announcement follows heavy speculation on the proposed deal.
Likely success for I Squared Capital with Arriva follows the private equity firm’s failed pursuit of FirstGroup in 2022. If completed, the deal will bring a close to the long-touted sale of Arriva by DB, with Arriva noting that I Squared Capital “has a track record of successful investments in infrastructure companies.”
Arriva adds that the likely purchaser “has a reputation for helping management teams to improve operational performance while also investing significant capital in companies to support their transition to sustainable public utilities.”
DB says that the sale will allow it to focus resources on its core railway business and foster growth in that market in Germany, which has been troubled in recent years. It purchased Arriva in 2010. Various “non-core” Arriva operations outside the UK have been sold since 2022.
Arriva Group CEO Mike Cooper adds that the proposed sale represents “a great opportunity” for Arriva and that it will be “the start of a new chapter for our business.” Mr Cooper believes that I Squared Capital shares a belief in sustainable transport services “that cater for the needs of tomorrow, as well as the pressures of today.”
DB Member of the Management Board for Finance and Logistics and CFO Dr Levin Holle says that the current owner expects that I Squared will “support Arriva in its future growth.”
“The sale to I Squared will give Arriva new options to support its growth potential, for example for the future of electrification of European fleets. For us, the agreed sale is an important step to focus even more on additional growth in rail transport in Germany.” Arriva formed a Zero Emission Institute in 2022.
The Arriva brand will be retained after the transaction completes, Mr Cooper continues. In a hint that some parts of the operation may have stagnated under DB, he adds that the change of ownership will give Arriva “a new lease of life” and “unlock new opportunities.”
Mr Cooper says that the transfer will additionally “create new opportunities for Arriva’s passengers, colleagues and passenger transport authorities, while also helping to protect the plant by supporting a low carbon energy transition.”
