Bolt from the Blues

Hands up those of us who saw this one coming. There was speculation all last year about major structural change within the UK transport sector but aside from smaller UK player Transdev, little happened. And there was talk of foreign takeovers.

Here we are in 2010 and Arriva confirmed yesterday it was talking with the French SNCF, part owners of Keolis, regarding a merger or take-over of the Keolis business. Arriva said it was in “very preliminary discussions”. Whereas Arriva is the strongest UK transport operator in Europe, it has no presence in France. France is well and truly tied up by the French, usually through nationalised or part-nationalised industries. And don’t mention any anti-British sentiment.

There were reports before the summer that French transport giants Keolis and Veolia were possible suitors though, in the even, we now that the parallel reports of a Veolia and Transdev merger were confirmed.

There remains the potential to see the Big Five reduce in number. The City’s long been after reorganisation in the transport sector. Any deal has the potential to see some interesting tie-ups in UK transport. Will the OFT be amused? For example, Keolis is a minority shareholder in GoVia, the Go Ahead rail franchise operator along the south coast and London Midland. Keolis is a partner with First Group in Transpennine Express. Yes, I know, it's different on the railways.

Keolis left the UK bus market almost exactly a year ago upon the sale of Eastbourne Buses to Stagecoach. Keolis held a 20 per cent stake. Keolis sunk some £500K into that business and got little or no return for it. Probably wisely, Keolis decided against exercising its option to increase its Eastbourne Buses stake to 49 per cent.