German state railway Deutsche Bahn (DB) has moved a step closer to selling Arriva in a bid to plug a multi-million financial gap. The DB supervisory board has instructed managers to look into various options for disposing of Arriva, including selling the entire business or parts of it and floating the company on the stock exchange. A final decision is expected in September.
Sunderland-based Arriva operates buses and trains in 14 countries and employs more than 50,000 staff. The worth of the business has been put at between €3.5billion and €4billion (£3.1billion and £3.54billion). DB says turnover in 2018 was €5.44billion (£4.67billion).
DB has come under heavy criticism in Germany for its poor performance and for dragging its feet on much-needed investment. The railway company has ordered new trains and needs to plug a funding gap of around €4billion (£3.44billion).
The federal audit office issued a report to the German government in January urging DB to sell off what it called ‘superfluous parts of the business’, namely Arriva and freight company DB Schenker.
Trades unions say the sale of profit-making units like Arriva is regrettable but that members would not oppose any deal that strengthens DB’s equity position.
