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Arriva for sale?

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DavidGrain

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I wonder how wise it is to sell it in the first place. While it will give DB a nice bit of cash, it will also loose its most profitable arm.

The problem is that DB have no choice, They are about to breach their borrowing limit as set out in law by the German Federal Parliament and Arriva is the only part that they can parcel up as a saleable unit that will bring in the most cash. They need cash and they need it now.
 

Mikey C

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Unless the price offered is massively differently, it might be less embarrassing to sell to an anonymous private equity firm rather than their neighbours SNCF :D
 

overthewater

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Im hearing Abellio is the front runner ( maybe the only runner ) for Arriva? - Has anyone heard anything along those lines? Before we jump the gun, if this is the case, would Abellio reentry the bus market after getting rid or would it then sell off its bus side? That is impossible Q to answer right now.
 

winston270twm

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Im hearing Abellio is the front runner ( maybe the only runner ) for Arriva? - Has anyone heard anything along those lines? Before we jump the gun, if this is the case, would Abellio reentry the bus market after getting rid or would it then sell off its bus side? That is impossible Q to answer right now.

No! Abellio hasn't even been mentioned in any of the press speculation of bidders for Arriva to date.

Abellio hasn't left the bus market, it still owns its only UK op Abellio London (formerly Travel London) that it acquired off NX Group in 2009.
 

Robertj21a

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Im hearing Abellio is the front runner ( maybe the only runner ) for Arriva? - Has anyone heard anything along those lines? Before we jump the gun, if this is the case, would Abellio reentry the bus market after getting rid or would it then sell off its bus side? That is impossible Q to answer right now.

No, not heard anything of the sort. Indeed, Abellio hasn't even been mentioned anywhere as far as I know. I'm sure the media has referred to there being 3-4 'keen' potential buyers.
 

overthewater

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Its come from a few people, who work in with the industry. Hence why I wanted to cross ref this, mind you there got Scotrail winner right.
 

coppercapped

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All the action is taking place in Berlin - rumours in the UK are simply speculation.

An article in the Suddeutsche Nachtrichten (in German - but use Google Translate) from May suggests that because of the uncertainties caused by Brexit DB AG is considering splitting Arriva into Arriva UK and Arriva EU and selling the parts separately. However nothing has yet been decided and no decision is expected before the end of the year.

Nevertheless DB AG needs the cash - and hopes to raise between €3.5 and €4 billion. Arriva has 17,000 buses and 1,100 trains in service in Sweden, the Netherlands, Spain, Italy and the UK - but none in Germany - and is a profitable operation.
 

winston270twm

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Its come from a few people, who work in with the industry. Hence why I wanted to cross ref this, mind you there got Scotrail winner right.

As Arriva Group is mainly made up of bus operations UK & European, how many bus operations have Abellio bought since acquiring Travel London in 2009 (now Abellio London) ? Zero!

Everyone knows the outcome of Rail Frachise winners long before the official award.
 
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Anthony ross

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Although Abellio have done well in the recent TfL tender awards I’m quite surprised that they haven’t sold the Abellio London as they seem to be more interested in the rail franchises than they do the bus businesses that my opinion anyway
 

winston270twm

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Although Abellio have done well in the recent TfL tender awards I’m quite surprised that they haven’t sold the Abellio London as they seem to be more interested in the rail franchises than they do the bus businesses that my opinion anyway

That was my point, I would have liked NX to retain Travel London, but Richard Bowker got the group in a large mess and they needed the cash.

All the action is taking place in Berlin - rumours in the UK are simply speculation.

An article in the Suddeutsche Nachtrichten (in German - but use Google Translate) from May suggests that because of the uncertainties caused by Brexit DB AG is considering splitting Arriva into Arriva UK and Arriva EU and selling the parts separately. However nothing has yet been decided and no decision is expected before the end of the year.

Splitting Arriva Group in to two divisions i.e. UK & Europe may help the European division command a higher sale price, as I doubt there's a big queue of suitors keen to buy in to UK bus ops at present.

 

coppercapped

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As Arriva Group is mainly made up of bus operations UK & European, how many bus operations have Abellion bought since acquiring Travel London in 2009 (now Abellio London) ? Zero!
Apart from '1,100 trains'...
Everyone knows the outcome of Rail Frachise winners long before the official award.
Really?

So which of your sources is living in Berlin?
 

winston270twm

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Apart from '1,100 trains'...

Really?

So which of your sources is living in Berlin?

You will notice that the Abellio discussion centres on interest in bus operations UK & Europe, not trains!

What's Berlin got to do with the award of UK Rail franchises???
 

coppercapped

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You will notice that the Abellio discussion centres on interest in bus operations UK & Europe, not trains!

What's Berlin got to do with the award of UK Rail franchises???
The thread is concerned with DBAG's proposed sale of its subsidiary Arriva and Arriva also operates trains as well as buses. If you post in this thread one expects that the post is concerned with the subject.

So anything else is off-topic.
 

winston270twm

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The thread is concerned with DBAG's proposed sale of its subsidiary Arriva and Arriva also operates trains as well as buses. If you post in this thread one expects that the post is concerned with the subject.

So anything else is off-topic.

Read the recent discussion & subsequent responses before commenting. The post is very much concerned with the subject, is it not discussing 'Arriva for Sale' ?

I'm not aware of you having moderator status - therefore, Fyi, an 'Arriva Sale' thread was recently set-up in the 'Buses & Coach' section of the forum and we were swiftly referred back to the existence of this one by a Moderator.
 
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LNW-GW Joint

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DB would surely not be keen to hand non-German rail services to its rivals when it will strengthen their capability to bid in Germany?
Buses are rather incidental (to DB).
I'd have thought a non-rail 3rd party or equity group would work better for DB.
I'm also not sure how easy it would be to split Arriva's UK and EU operations when they are both run out of Sunderland.
 

winston270twm

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DB would surely not be keen to hand non-German rail services to its rivals when it will strengthen their capability to bid in Germany?
Buses are rather incidental (to DB).
I'd have thought a non-rail 3rd party or equity group would work better for DB.
I'm also not sure how easy it would be to split Arriva's UK and EU operations when they are both run out of Sunderland.

I don't think DB can afford to be too picky, they need the cash injection to pay down debt to allow them to compete in German Rail.

Head Office functions should be fairly easy to split, indeed depending on the potential buyer for the European arm, if an existing transport group, they will already have their own.
 

87015

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DB would surely not be keen to hand non-German rail services to its rivals when it will strengthen their capability to bid in Germany?
Buses are rather incidental (to DB).
I'd have thought a non-rail 3rd party or equity group would work better for DB.
I'm also not sure how easy it would be to split Arriva's UK and EU operations when they are both run out of Sunderland.
Rail division is in London, won't find anyone doing much in Sunderland.
 

coppercapped

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Read the recent discussion & subsequent responses before commenting. The post is very much concerned with the subject, is it not discussing 'Arriva for Sale' ?

I'm not aware of you having moderator status - therefore, Fyi, an 'Arriva Sale' thread was recently set-up in the 'Buses & Coach' section of the forum and we were swiftly referred back to the existence of this one by a Moderator.
Point taken, but all of the German language reports emphasise DB AG's desire to sell the company as a unit - preferably by a trade sale to an investor or, possibly, by floating it as a separate company. One proviso is the effect that Brexit may have on the sales process as although the company is based in the UK most of its sales are made on the continent. The report in the Suddeutsche Zeitung I referred to in an earlier post has this to say (my translation):
DB AG acquired the United Kingdom based Arriva in 2010 for about 2.8 billion euros. However Brexit now brings uncertainty into the sales process; although the company's business with regional lines in the various countries will hardly be influenced by Brexit, international investors could be deterred in the coming months, because it would be more difficult to operate on the continent with a company based in the British Isles.
Both UK and German sources such as The Daily Telegraph and the Frankfurter Allgemeine Zeitung were suggesting in mid-June that these investors/asset managment companies are interested:
  • Brookfield Asset Management,
  • the Carlyle Group,
  • Keolis
  • Apollo Global Management.
These are not venture capitalists, but asset management firms who tend to invest for the long term. How many of them will persist only time will tell, but DB's management board will decide on the form of sale in September and Richard Lutz, DB AG's chairman, is aiming to have the sale closed by the end of the year.
This discussion about Abellio buying Arriva's buses in the UK rather puts the cart before the horse. First come DB AG's divestment of Arriva and after that who knows what will happen.
Im hearing Abellio is the front runner ( maybe the only runner ) for Arriva? - Has anyone heard anything along those lines? Before we jump the gun, if this is the case, would Abellio reentry the bus market after getting rid or would it then sell off its bus side? That is impossible Q to answer right now.
In view of what has been published I don't understand why posters here are suggesting Abellio might bid for Arriva - which I understand to mean the Arriva Group unless otherwise stated. At the moment only the group as a unit is for sale.
If Abellio were to bid - and its name has not yet been mentioned in publicly available documents in connection with the sale - it would certainly be aware of the competition issues facing it in its home country of the Netherlands - it may well have to divest itself of some activities where NS/Abellio/Arriva clash. Such issues could well reduce the sale price which DB AG badly wants to avoid.
This would suggest that a trade sale to an asset management group would be DB AG's preferred option as these conflicts of interest would be avoided - even if the UK and Continental operations were subsequently separated. If advice to DB AG was that a better price might be achieved if the group were split prior to the sale - and this would have to happen before it is known what the Brexit arrangements would be (DB AG board meeting in September and Brexit (possibly) in October) - then very little time remains to set this in motion.
 

Gems

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Now that Northern drivers have rejected the harmonisation package. It raises interesting prospects.
 

Bletchleyite

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Now that Northern drivers have rejected the harmonisation package. It raises interesting prospects.

Does it? Unless they strike, they could presumably just stay non-harmonised. Plenty of companies don't bother as it's too complex to be bothered with. I've worked for the same firm (via several mergers and demergers) since 2006 and I have the same contract as the day I started.
 

winston270twm

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Point taken, but all of the German language reports emphasise DB AG's desire to sell the company as a unit - preferably by a trade sale to an investor or, possibly, by floating it as a separate company. One proviso is the effect that Brexit may have on the sales process as although the company is based in the UK most of its sales are made on the continent. The report in the Suddeutsche Zeitung I referred to in an earlier post has this to say (my translation):

Both UK and German sources such as The Daily Telegraph and the Frankfurter Allgemeine Zeitung were suggesting in mid-June that these investors/asset managment companies are interested:
  • Brookfield Asset Management,
  • the Carlyle Group,
  • Keolis
  • Apollo Global Management.
These are not venture capitalists, but asset management firms who tend to invest for the long term. How many of them will persist only time will tell, but DB's management board will decide on the form of sale in September and Richard Lutz, DB AG's chairman, is aiming to have the sale closed by the end of the year.
This discussion about Abellio buying Arriva's buses in the UK rather puts the cart before the horse. First come DB AG's divestment of Arriva and after that who knows what will happen.

In view of what has been published I don't understand why posters here are suggesting Abellio might bid for Arriva - which I understand to mean the Arriva Group unless otherwise stated. At the moment only the group as a unit is for sale.
If Abellio were to bid - and its name has not yet been mentioned in publicly available documents in connection with the sale - it would certainly be aware of the competition issues facing it in its home country of the Netherlands - it may well have to divest itself of some activities where NS/Abellio/Arriva clash. Such issues could well reduce the sale price which DB AG badly wants to avoid.
This would suggest that a trade sale to an asset management group would be DB AG's preferred option as these conflicts of interest would be avoided - even if the UK and Continental operations were subsequently separated. If advice to DB AG was that a better price might be achieved if the group were split prior to the sale - and this would have to happen before it is known what the Brexit arrangements would be (DB AG board meeting in September and Brexit (possibly) in October) - then very little time remains to set this in motion.

I agree, DB don't want to be faffing around selling off bits to all and sundry. They want to sell it as a job lot or may consider splitting the UK & European parts in to two, as a last resort Arriva Group will be floated on the stock market. The first press speculation regarding Arriva sale was that Stagecoach were mulling a takeover bid (see below), but they've not been mentioned since. I also saw somewhere suggestions that David Martin former Arriva Group CEO was forming a consortium to buy back Arriva off DB, may be one of the above Asset Management suitors may recruit David martin to head it for them? Indeed he decided not to step forward as Coast Capital's nominee in their recent attempted boardroom coup at First Group.


Stagecoach mulls a takeover of the UK's largest bus operator Arriva after it goes up for sale
  • City sources said Stagecoach is interested in buying Arriva's bus business
  • Arriva has been put up for sale by German Transport giant Deutsche Bahn
  • It operates more than 5,000 buses in Britain and has divisions across Europe
By Ben Harrington, Financial Mail on Sunday

Published: 21:48, 13 April 2019 | Updated: 11:07, 14 April 2019
Stagecoach is considering a bid for some or all of rival Arriva, the UK's largest bus operator.

City sources said the FTSE 250-listed transport giant is particularly interested in buying Arriva's bus business.

London Overground operator Arriva – acquired in 2010 for £1.5billion – has been put up for sale by German Transport giant Deutsche Bahn.

12234842-6918893-image-a-8_1555177650069.jpg


Stagecoach is considering a bid for some or all of rival Arriva, the UK's largest bus operator

In the UK, Arriva runs rail franchise Northern, which has been hit by a long-running dispute with the RMT union over the role of guards on trains.

Arriva, which operates more than 5,000 buses in Britain, also has divisions across Europe.

Last year, Arriva, which handles all of Deutsche Bahn's regional transport services outside Germany, generated revenues of €5.44billion (£4.7billion).

Deutsche Bahn had looked at selling Arriva in 2016 but delayed the disposal because of the surprise Brexit referendum result.

The German group is looking to offload Arriva to help manage its mounting debts. An investment of €1billion (£860million) in new high-speed trains last autumn pushed its debts to €20billion (£17billion).

Stagecoach declined to comment.
https://www.thisismoney.co.uk/money...Ks-largest-bus-operator-Arriva-goes-sale.html

I believe the 'Abellio now being front runner' suggestion is a complete red herring, it probably came from a Scotrail driver.... There's zero evidence to suggest Abellio would be interested in Arriva Group, the main evidence being the lack of interest in any bus operations since NED Railways acquired Travel London from NX group back in 2009, other than setting up their own small rail replacement bus operation for a time in Liverpool (I think), nothing! They are only interested in UK & more recently German Rail.
 
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Gems

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Does it? Unless they strike, they could presumably just stay non-harmonised. Plenty of companies don't bother as it's too complex to be bothered with. I've worked for the same firm (via several mergers and demergers) since 2006 and I have the same contract as the day I started.
I think it does, or might. They needed this harmonisation to end the Sunday chaos of driver shortages especially in the North West. It has been chucked back at them.

You don't generally get this sort of mayhem on the east side, maybe whoever thought it was a great idea to merge ATN & FNW should now be having a word with themselves.
 

pdeaves

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I think it does, or might. They needed this harmonisation to end the Sunday chaos of driver shortages especially in the North West. It has been chucked back at them.

You don't generally get this sort of mayhem on the east side, maybe whoever thought it was a great idea to merge ATN & FNW should now be having a word with themselves.
I don't think that has much bearing on the sale-ability of Arriva, though. Any financial hit would be very small fry compared to the group as a whole. That's not to say harmonisation should or shouldn't happen, just that it's an independent issue to selling Arriva.
 

tgrb

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Just found this on the Arriva Carreras site

https://jobs.deutschebahngroup.careers/jobs/JobDetail/VP-M-A/51438

They are looking for both a Merger and acquisition Manager and associate, and this is not about being sold, part of the advert states

“ The main purpose of the role will be to grow Arriva’s market position, moving into new modes and new markets, through acquisitions, predominantly in Europe, and beyond.“

This is interesting as I wouldn’t have though that would be a priority while gearing up for disposal?
 

DavidGrain

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Arriva are obviously looking to life outside DB but if they are bought by another transport group this job could disappear before it starts.

I think they should have proofread the job description better.

"Management and coordination of all aspects of contemptuous M&A projects, at different stages in the process,"
contemptuous !!?? I am thinking contemporaneous possibly but that is a longer word.

Also they are advertising to the wrong people because M&A Manager is definitely not a job to go in the Sales/Key Account Manager (ie Sales and Marketing) especially if they are advertising for a qualified accountant.
 

overthewater

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https://www.cityam.com/carlyle-in-d...M6wm6FKMVcnzddmFCLzwTTzB5yqWhk4T0443Yikjxbf4o

American private equity firm Carlyle is the front-runner to buy Arriva in a deal worth £2.2bn.

Carlyle has entered talks with one of the UK’s largest public transport operators, which runs rail franchises including Northern and London Overground, as well as buses across Britain.

Arriva’s German parent group, Deutsche Bahn, has been exploring the possibility of selling the company or floating it on the stock market.

Any takeover would not include the Northern Rail contract, however, Sky News reported.

The delay to Brexit has complicated any possible sale and a decision is not likely before the end of this year.

Carlyle is at the front of the queue should Deutsche Bahn opt to sell the subsidiary and a formal offer is expected this month, the report says.

A number of parties have been linked with an offer for Arriva, including Apollo Global Management, while transport groups such as Stagecoach and Keolis are said to be interested only in acquiring parts of the company.

Arriva employs 53,000 people and was purchased by Deutsche Bahn in 2010 for £1.5bn, but the group is looking to reduce its €20bn debt.

Read more: Train delays and shoddy rail service holding back British

A spokeswoman for the Deutsche Bahn said on Friday: “We have always made it clear that we are working on a dual-track process for DB Arriva. In concrete terms, this means a sale to an investor or an IPO.”

Global investment firm Carlyle has around $222bn of assets under management. It could not be reached for comment.

https://news.sky.com/story/carlyle-on-track-to-make-eur2-5bn-bid-for-northern-rail-owner-11851282

One of the world's biggest buyout firms has become the leading contender to acquire the company behind the beleaguered Northern Rail franchise in a deal worth about €2.5bn (£2.16bn).

Sky News has learnt that Carlyle has entered exclusive talks to buy Arriva Group, which operates in 14 European countries and employs 53,000 people.


Arriva's owner, the German state-owned transport group Deutsche Bahn, has been deliberating whether to sell or float the company for several months.

A final decision is unlikely to be made before the end of the year, with uncertainty over the outcome of the Brexit process a factor in Deutsche Bahn's thinking.

However, City sources said on Friday that Carlyle was now the "clear frontrunner" to buy Arriva if the German group decides to pursue an outright sale.


An insider said on Friday evening that the controversial Northern Rail contract would be excluded from a takeover of Arriva by Carlyle.

A formal bid is expected to be tabled this month and be considered by Deutsche Bahn board members in December, they added.

Rival bidders who showed an interest earlier in the dual-track process, including Apollo Global Management and a number of multinational transport companies, could still renew their appetite for a takeover.

Reports in recent months had indicated that Deutsche Bahn was seeking bids in excess of €3bn (£2.6bn), which could mean that any formal offer from Carlyle is deemed inadequate to clinch a deal.

Deutsche Bahn has owned Arriva, which is one of Britain's biggest public transport operators, since 2010, when it struck a £1.6bn takeover deal.

Founded in a motorcycle shop in Sunderland by the Cowie family in 1938, Arriva gradually grew into a bus and train operator with a presence across much of Britain.

It now operates in countries including the Czech Republic, Croatia, Denmark and Poland and boasts of carrying 2bn passengers across its network each year.

Arriva also trades in the Netherlands, which is reported to be the likeliest destination for a stock market listing.

In the UK, Arriva has faced severe criticism over the crisis at Northern Rail, which has been beset by punctuality and capacity problems.

Grant Shapps, the transport secretary, recently said he had asked his officials to draw up contingency plans for nationalising the franchise, which operates 2800 services every day.

A mismanaged overhaul of Northern Rail's timetable last year caused chaos for many thousands of passengers.

Arriva has also clashed with the government - notably Mr Shapps' predecessor, Chris Grayling - over the process for awarding the East Midlands rail franchise.

In the bus sector, Arriva has an 18% share of the London market and a 15% share in the regions.

Acquiring the company would represent a big bet for Carlyle, which is facing seeing the remainder of its holding in the minicab company Addison Lee wiped out of it is taken over by its lenders.

Arriva's rival, FirstGroup, is also facing a shake-up, with a proposal to sell its UK bus division following a campaign led by an activist investor.

Sources indicated on Friday that if it proceeded with a deal, Carlyle would deploy capital from several of its different funds to finance it.

The private equity group could also seek to team up with some of its own fund investors - or limited partners - to contribute financing.

Arriva and Carlyle declined to comment, while Deutsche Bahn said it had always indicated its intention to pursue a dual-track disposal process.

Deutsche Bank is advising the German transport company.
 
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