Arriva seeks a tie-up with France’s Keolis

BUS and rail group Arriva is talking to French state railway SNCF about a deal that could create a European transport giant.
Sunderland-based Arriva has held early-stage talks with SNCF about acquiring all or part of public transport operator Keolis, in which SNCF has a 44.5 per cent stake.
The combination of the two businesses would create a group with revenues of almost £6bn, challenging the UK’s biggest transport firm, FirstGroup, which achieved sales of £6.2bn in the year to 31 March.
It would give Arriva a large foothold in France, where the British company has yet to create a presence to match its operations in other major European countries such as Scandinavia.
“Arriva confirms it has held very preliminary discussions with SNCF regarding a possible contribution of all or part of Keolis’ transportation business to Arriva to create a significantly enhanced and leading European transport business,” the UK-based business said.
It added: “The board affirms discussions are at a preliminary exploratory stage and there is no certainty any agreement will be reached.”
Arriva posted 2008 revenues of £3bn and Keolis had turnover of €3.2bn (£2.8bn).
Keolis generated 56 per cent of sales in France with the remainder coming from its international operations.


Keolis has 160 subsidiaries and 40,000 staff in eight European countries and in Algeria, Australia and Canada, where it runs buses, metro systems, trams, trains, trolleybuses, airport services, sea links and transport for individuals.

In France, Keolis operates 80 urban bus networks ­– including a fleet of 5,000 buses and more than 15,000 staff – as well as nearly 200 kilometres of light rail services such as metro and tram services.

In the UK, Keolis has a 35 per cent stake in the Govia joint venture with Arriva’s rival Go-Ahead (which owns the remaining 65 per cent), which runs the Southern, Southeastern and London Midland rail franchises. Govia said it is the UK’s busiest rail operator, running 28.7 per cent of all passenger journeys.

Arriva employs more than 44,000 staff and runs buses and trains in 12 European countries, including the Czech Republic, Denmark, Germany, Hungary, Italy, the Netherlands, Poland, Portugal, Slovakia, Spain, Sweden and the United Kingdom.

In the UK, it runs the CrossCountry and Arriva Trains Wales rail franchises as well as buses across the country and in London, where it runs regulated services under contract to the capital’s transport authority, Transport for London.

The firm said it is responsible for more than a billion passenger journeys a year.

The Sunderland-based group, along with its major rivals Stagecoach, FirstGroup, Go-Ahead, and National Express, is facing an investigation over concerns that limited competition is driving up fares.

The Office of Fair Trading (OFT) has asked the Competition Commission to investigate the industry after finding that a distorted market may be causing higher prices and poorer services for the travelling public.