2nd UPDATE: Arriva In Merger Talks With Keolis
January 28 2010 - 10:49AM
Dow Jones News
U.K. bus and rail operator Arriva PLC (ARI.LN) Thursday said
it's in preliminary talks with state-owned Societe Nationale des
Chemins de fer Francais, or SNCF, about a possible takeover of
France's public transport operator Keolis.
Arriva said talks are at an exploratory stage and cautioned
there is no certainty an agreement will be reached.
The talks with SNCF center on the "possible contribution of all
or part of Keolis' transportation business to Arriva to create a
significantly enhanced and leading European transportation business
focused on the increasing liberalization of the transportation
market in Europe."
Keolis is owned by French insurer Axa SA (AXA), through Axa
Private Equity and the Caisse depot et placement du Quebec, which
have a 52% stake. SNCF has a 45.5% interest with key Keolis
managers holding the remaining 2.5%.
SNCF wasn't immediately available for comment and Axa didn't
return calls.
Keolis is a minority partner with Go-Ahead Group PLC (GOG.LN) in
Govia, which runs Southern, Southeastern and London Midland rail
franchises in the U.K. It also operates the TransPennine Express
rail franchise in partnership with FirstGroup PLC (FGP.LN).
In 2008, Keolis carried some two billion passengers and recorded
revenue of EUR3.3 billion. It employs some 36,000 people across 11
countries. About 44% of its business is outside France.
In comparison, Arriva posted a full-year revenue of GBP3 billion
for 2008 and employs 44,000 people across 12 European
countries.
At 1458 GMT, Arriva's shares traded up 15 pence, or 3.2%, while
the FTSE 250 Index traded up 0.6%. The shares have gained 7.9% in
value in the past 12 months. The company has a market
capitalization of GBP962 million.
By Kaveri Niththyananthan, Dow Jones Newswires; 4420 7842 9299;
kaveri.niththyananthan@dowjones.com
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