DeutscheBahn sells off public transport firm Arriva to U.S. investment group

Deutsche Bahn (DB) is selling its subsidiary Arriva to the American investment firm I Squared Capital, the German public transport company announced on Thursday. The announcement mentioned no figures, but according to the Financial Times, Arriva is worth around 1.6 billion euros.

Arriva is active in ten markets, including the Netherlands. Here, the company offers bus and train transport, primarily in the northern provinces. About 5,500 of Arriva’s 35,500 employees work in the Netherlands, according to ANP.

DB is selling Arriva to enable extra growth in rail transport in Germany and to focus its resources more on its core business. The company expects the deal to be completed in 2024, subject to the approval of the relevant authorities.

According to the Financial Times, I Squared Capital plans to push 2 billion euros into Arriva to grow and electrify the fleet. Mohamed El Gazzar, a senior partner at the Miami-based infrastructure investment firm, told the newspaper that the move was motivated by the growing need to decarbonize transport.

“We are very confident about this megatrend.  If you want to meet any target when it comes to decarbonization, you have to think about electrifying the fleet,” El Gazzar said to FT. “There is no solution but to continue to deploy capital in public transport.”

Mike Cooper, CEO of the Arriva Group, is excited by the acquisition. “I Squared has an established track record of supporting companies that provide essential services and of investing in the energy transition. We are delighted that they have committed to providing Arriva with long-term capital for investment in innovation across our services, our assets, and our people,” he said.