Freshfields, Skadden lead on Deutsche Bahn’s Arriva sale to I Squared Capital

Freshfields acts for Deutsche Bahn in deal valuing Arriva at reported €1.6bn

Freshfields Bruckhaus Deringer and Skadden Arps Slate Meagher & Flom are acting in Deutsche Bahn’s sale of transport business Arriva to Miami-based infrastructure investor I Squared Capital.

The deal values Arriva, which operates train services and red London buses in the UK, at a reported €1.6bn. Freshfields has advised Deutsche Bahn and Arriva on the matter, while Skadden has acted for I Capital. 

Deutsche Bahn said it was selling Arriva to “enable additional growth in rail transport in Germany and allow it to focus its resources on its core business”. The company first put Arriva up for sale back in 2019 to reduce its own debts, which stood at €28.8bn at the end of 2022. 

The Freshfields team was led by partners Richard Thexton and David Sonter and senior associate Yvonne Barry, together with associates Tim Wuttke-Henshall, Charmaine Ho and Christine Khuat; partner Nick French, senior associate Theo Souris and associate Aaron Hanif on antitrust matters; partner Jill Gatehouse and associate Nicola Cavey on tax matters; partner Andrew Murphy and senior associate Lauren Jackson advising on pension and employment matters; while separation and IP support is provided by partner Giles Pratt, senior associate Tony Gregory and associate Jamaal Jackson.

Freshfields said the team had worked closely with Arriva and Deutsche Bahn over a number of months to deliver the transaction, in particular with the Deutsche Bahn legal team of Alexander Wismeth, Martin Lamm, Thomas Götze and Christian Wörz and the M&A team of Stefan Klenke, Thomas Wagner and Philipp Lohöfer and with the Arriva legal team of Scott Marshall and Helen Seeber.

Meantime, the Skadden team included private equity partners Richard Youle – co-head of private equity – and Steven Hannah; corporate counsel Benjamin Davies, Emma Ghaffari and Chetan Sheth, and associates Janou Kannangara, Ashleigh Morton and Iseult Martin; IP and technology counsel Eve-Christie Vermynck; tax partner Alex Jupp; M&A partner Giorgio Motta (Brussels); and banking partner Pete Coulton. All attorneys are located in London, unless otherwise noted.

The firm has advised I Squared on other deals in the past, including its £2.3bn acquisition of Scottish energy company Aggreko in 2021 along with TDR Capital. In 2019 the firm advised on I Squared’s acquisition of auto leasing firm PEMA from Société Générale. 

The Guardian reported that the value of the Arriva deal suggests Deutsche Bahn – which paid €2.7bn for the Sunderland-based company back in 2010 and has been described as being in “permanent crisis” by Germany’s national audit office – made a loss on the sale. 

Arriva employs around 35,500 people and transports 1.5 billion passengers each year across 10 European countries. 

The sale to I Squared is expected to complete in 2024, pending approval from Deutsche Bahn’s supervisory board and the German transport ministry. 

Citigroup advised Deutsche Bahn, while I Squared was advised by UBS and Morgan Stanley. 

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