DB buys Arriva

[michael blunck]

Deutsche Bahn buys Arriva for £1.5bn:
http://news.bbc.co.uk/2/hi/business/8636503.stm

Wonder how this will turn out. Instead of repaying their debt, yet more expensive investments are done ...

regards
Michael

[Geo Ghost]

Perhaps they will run more on time heh

[Kevo00]

Would be interesting to know what percentage of European transport this will mean they now control.

[michael blunck]

IMO, it´s a missed opportunity. After the failed going-public in 2009 and the withdrawal of former CEO Mehdorn, both the new CEO Grube and the German Ministry of Transportation wanted to go "back to business": concentration on the core business, reduction of debt, etc. pp.

Just words. Now, the Arriva deal will be the largest takeover in the history of the DB.

But the DB is not in a good shape at the time being. Since years, its management is not up to the many tasks in Germany: the ICE problems, the Berlin S-Bahn disaster, and many many more. I really doubt that a large new aquisition would reduce the DB´s management problems. On the contrary.

In addition, I don´t see any perspective for the owners (the German cititzens, still!). That´s the old Mehdorn doctrine: We are building a global company by acquisitions, and then we´re going to sell part of it by going public. But this already failed miserably, most of former acquisitions were disappointing, to say the least.

In fact, the other way round would make much more sense for the German owners: a better performance at affordable prices in Germany, and a good revenue through sales of individual business units that do not belong to the core business of the DB.

The Arriva takeover, however, seems to focus on the old outdated thinking. I understand that the real aim is not the problematic british railway market, but Arriva´s business activities in third countries, but anyway, that´s not a much better perspective.

regards
Michael

[Nawdic]

To be honest this is good... Arriva London (bus) have always had rivals, such as Metrobus, (one of the best Go-Ahead companies) and they managed to do worse than everyone else.

In my own words, Good riddance to Arriva.

[atomicdanny]

To be honest this is good... Arriva London (bus) have always had rivals, such as Metrobus, (one of the best Go-Ahead companies) and they managed to do worse than everyone else.

In my own words, Good riddance to Arriva.

Arriva are british though, so that's another british company gone (so its a good thing one way but a bad thing for the other!)

[Kevo00]

I guess the UK's mistake was breaking up its 'national champion' in this industry (BR). But we weren't to forsee other countries embarking on a series of state-sponsored take-overs. What Michael says is interesting, I will have to do more research into it, as I'm not as up to speed on this as I should be. DB will have to integrate Arriva into their hierarchy - it is difficult to build a multinational company in ten years efficiently - though others have done it (think of Vodafone, Tesco, Google etc.), DB are of course inheriting local management structures that they didn't invent. So I imagine that will be a problem.

On a more superficial level, I wonder if we will see a re-branding of Arriva - DB Cymru? DB Buses on Britain's streets?

[atomicdanny]

On a more superficial level, I wonder if we will see a re-branding of Arriva - DB Cymru? DB Buses on Britain's streets?

Chiltern is still called Chiltern though with no mention of DB if that means anything?, although in the case of Arriva the welsh part will be renamed (I assume), although Cross Country may still remain the same as it is normally referred to as "Cross Country" rather than "Arriva Cross Country"

[Nawdic]

Its possible that they could do what NedRail did to Travel London (bus company)... Rename it to Abellio... DB could also re-nationalise the UK as well...

[Ameecher]

How does this affect the EU monopoly laws because I understand it (and I haven't looked into the topic much) some DB routes were tendered to privatised companies (some of which were won by Arriva?), is it fine within EU law for DB just to buy them back?

[audigex]

Presuming arriva won the deals before sale proceedings were started, it's probably untouchable. If not, it might depend on whether they catch on, but I'd guess you're right - sell the rights to a company, then use that money to buy the company itself? Bit iffy.

[Kevo00]

Its incredibly difficult to transfer competition law to transport, because you can always drive instead, or maybe take a bus not owned by DB/Arriva. Also, presumably the routes taken over by Arriva in Germany were already subsidised regional routes and thus not subject to the laws around state subsidy as market distortion.

[welshdragon]

Chiltern is still called Chiltern though with no mention of DB if that means anything?, although in the case of Arriva the welsh part will be renamed (I assume), although Cross Country may still remain the same as it is normally referred to as "Cross Country" rather than "Arriva Cross Country"

We simply can't speculate this early on what the intentions of DB are. Yes, Cross Country will retain that name and brand, it will just be owned by a different agency. It's anybody's guess what they'll rename all the bus operations to though.

[orudge]

although in the case of Arriva the welsh part will be renamed (I assume)

Why would it be? If anything, the "Wales" part would seem to be the most likely to stay as it is. Perhaps of course the WAG would step in and give the Welsh franchise a permanent "brand", irrespective of operator, as the Scottish Government has gone with ScotRail.

Plus, as pointed out, Chiltern don't have "DB" in their title anywhere, and nor do Wrexham and Shropshire.

[Welsh Z]

I for one hope for a re-branding of the Wales area of operations, just for the small chance of seeing a pacer in DB red

[welshdragon]

Doubtful!

[61653]

Might solve the problem of the proposed Aberystwyth-London service: Now that Arriva & WSMR are both owned by DB, WSMR can't really object any more. The service could even be operated by WSMR using the 67/Mk3 sets rather than a sexed-up 158...

[welshdragon]

Might solve the problem of the proposed Aberystwyth-London service: Now that Arriva & WSMR are both owned by DB, WSMR can't really object any more. The service could even be operated by WSMR using the 67/Mk3 sets rather than a sexed-up 158...

WSMR weren't the only objectees, and 67's aren't ERTMS fitted (and I suspect it'd be too expensive to fit it to them too)

[audigex]

Would ICE3's in North Wales be too much to ask for, then?

[welshdragon]

Haha, I don't think they'd fit through the Tube at Conwy!