Arriva drives into German bus market.

Byline: By Guy Anderson 

Transport group Arriva has continued a push into Germany with the pounds 15.4m acquisition of one of the country's largest bus operators.

The Sunderland-based firm's purchase of Sippel Group ( which operates in Frankfurt, Mainz and Wiesbaden ( follows the purchase last year of a majority stake in train company Regentalbahn AG.

It expects its mainland European businesses to turn over pounds 1bn annually within five years, and Germany is on course to become its second biggest market outside the UK.

Bob Davies, chief executive of Arriva, said: "The German public transport market is the largest in Europe, with the bus and rail sectors rapidly moving to a competitive tendering environment.

"This acquisition allows us to participate in future tenders for bus services in one of Germany's most important economic regions."

Arriva paid pounds 15.4m for Sippel, with an additional maximum charge of pounds 2.1m based on performance targets up to 2008. The group currently employs a staff of 740 and operates 220 vehicles.

Sippel ( which provides public transport to municipal clients, plus private companies like Frankfurt Airport ( turned over pounds 22.8m in 2003, and saw pre-tax profits of pounds 3.7m.

Mr Davies said: "Sippel has an excellent reputation for delivering high quality services to its customers and we look forward to working with the management and employees of this successful business to capitalise on further opportunities in this market."

A presence in Germany will allow Arriva to take advantage of moves to deregulate the market.

Mr Davies added: "The German bus market, like the rail sector, is evolving towards competitive tendering. The Rhine Main Public Transport Agency has already started the process of contracting out bus services."

Arriva ( which operates a total of 5,500 buses and 225 trains across the continent, employing 14,000 staff ( has pushed into Denmark, Italy, the Netherlands, Portugal and has identified opportunities in France, Poland, the Czech Republic, Hungary and the Baltic states of Estonia, Lithuania and Latvia.

Mainland European sales currently contribute pounds 500m annually to the group turnover of pounds 1.7bn.

It's move into the German transport market began in April when it bought rail company Prignitzer Eisenbahn Gruppe, which operates regional rail services in the states of North Rhine-Westphalia, Brandenburg and Mecklenburg-West Pomerania.

In October it acquired a 76.9pc stake ( since increased to 89.8pc ( in Regentalbahn AG; a group with a presence in Bavaria, Thuringia and Saxony.

Arriva shares were largely unmoved at the close of trading yesterday, edging just 2p ahead at 556.75p.