Deutsche Bahn plans Arriva 2020 IPO

Initial public offering comes as talks with Carlyle Group end in failure


Deutsche Bahn, the German state-owned railway operator, has outlined its plans to list its international transport unit Arriva next year.

From May the firm is preparing to offer a minority stake in Arriva, with the remaining shares to be sold over the next three years.

Deutsche Bahn’s chief executive Richard Lutz stated: “We definitely want to go public next year and then sell over a somewhat stretched-out period. Lutz has been in the position since 2017 and faces pressure to turn the operational and financial performance of the deeply indebted company around.

Arriva employs over 50,000 people across the continent and currently operates British rail franchises including Northern Rail and the London Overground. It also runs a number of bus networks around the country.

A Deutsche Bahn spokeswoman confirmed the report but declined to give any further details.

Deutsche Bahn was reported to be in exclusive talks with The Carlyle Group, the American private equity firm. The sale of Arriva was discussed as well as a potential initial public offering. These talks have failed however, after Carlyle’s bids did not satisfy Deutsche Bahn’s price expectations.

Earlier this year, such a sale was expected to be worth €3-4bn (£2.5-£3.3bn, $3.3-$4.4bn).

Mr Lutz outlined his plans for Deutsche Bahn to offer a bond next year in the hopes of raising up to €3bn (£2.5bn, $3.3bn). As well as emerging from its indebted position, Deutsche Bahn is seeking to raise enough funds to pay for the €10.7bn (£9bn, $12.1bn) investment in Germany’s rail network that it promised earlier this year.

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