Logistics firm agrees to sell train service

Deutsche Bahn AG (DB) and I Squared Capital have signed an agreement for the sale of the whole of Arriva Group, including all of its operating businesses across 10 European markets, to I Squared, a leading global infrastructure investment manager.

The transaction is expected to complete in 2024, subject to the customary closing conditions, including the approval of the DB Supervisory Board and the Federal Ministry for Digital and Transport of the Federal Republic of Germany.

I Squared is a leading investor in transport and logistics and in decarbonisation technologies, with a track record of investing significant capital in companies to support their transition to sustainable modem public utilities.

As part of DB's Strong Rail Group strategy, the company announced that it intended to sell Arriva to enable additional growth in rail transport in Germany and allow it to focus its resources on its core business.

Deutsche Bahn acquired the British company in 2010.

Over the past few years, DB has worked successfully with Arriva to stabilise its business after the Covid impact and to focus the company's sustainable growth strategy on relevant markets.

The sale of non-core markets, including Arriva Sweden and Portugal in 2022 and Arriva Serbia, Denmark and Poland (Bus) was completed this year.

Dr Levin Holle, member of the management board for finance and logistics and CFO of Deutsche Bahn AF: "We are happy that I Squared is willing to support Arriva in its future growth.

“Arriva has good prospects for sustainable growth as market liberalisation in Europe progresses.

“The strategic goal of Deutsche Bahn is to make record level investments in environmentally friendly rail in our core business, combined with the massive increase of investment of the German Federal Government into our German rail infrastructure.”

Gautam Bhandari, global CIO and managing partner of I Squared said: “Transport accounts for around one-fifth of global COz emissions. Three-quarters of this is from road transport, and a greener public transport sector is critical to the shift to lower-carbon infrastructure.

"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, as well as providing cleaner air in cities and towns by investing in green public transport.

“We are excited to work with Arriva and we will invest to support its future growth as a major European bus and rail operator."

Mike Cooper (pictured), CEO of Arriva Group, said: "We want to see a future where people choose to leave their car at home, a future with less traffic congestion and cleaner air.

“This transaction marls an exciting next stage for us, and will deliver significant benefits for our colleagues, our passengers and the many Passenger Transport Authorities we partner with across Europe, enabling us to play our role in delivering a better future.

“I Squared has an established track record of supporting companies which provide essential services, and of investing in the energy transition. 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.

“We're confident that Arriva and I Squared together can play a vital role in delivering innovative and sustainable public transport offerings across Europe."