Deutsche Bahn AG has divested its subsidiary, Arriva, to global infrastructure investment manager, I Squared Capital. The transaction is expected to be completed in 2024 and is a key component of Deutsche Bahn's Strong Rail Group strategy, which aims to concentrate on its primary business and promote eco-friendly transport across Europe.
Arriva, which began as TSK Cowie, a secondhand motorcycle dealer in Sunderland, morphed into a car dealership and vehicle hire business during the 1980s deregulation. It has since grown into a transport giant with over 35,000 employees. The company was sold following the loss of the Northern rail franchise in 2020.
The sale aligns with Deutsche Bahn's strategy to focus on record-level investments in its core operations. This move is expected to support Arriva's exploration of growth opportunities such as European fleet electrification.
I Squared Capital plans to back Arriva's net-zero operations, decarbonisation strategies, and innovation across services. This move will contribute to the energy transition and green public transport. Both Gautam Bhandari of I Squared and Mike Cooper of Arriva have affirmed their commitment to this cause.
Freshfields is managing the disposal process for Deutsche Bahn, encompassing all businesses in 10 European regions. The Freshfields team, led by Richard Thexton and David Sonter, is working closely with Deutsche Bahn's legal team, including Martin Lamm. Alexander Wismeth of DB Arriva at Deutsche Bahn acknowledged Freshfields' exceptional performance in the transaction.
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