Deutsche Bahn taking over Arriva PLC

LONDON (AP) — U.K. bus and train operator Arriva PLC has agreed to be taken over by Deutsche Bahn in a deal valued at 1.6 billion pounds ($2.5 billion), the companies announced Thursday.

The 775 pence per share offer backed by the Arriva board represents a 34 percent premium over the closing price of Arriva shares on March 16, the day before the company announced that it had received an unsolicited takeover approach.

Arriva operates transport services in 12 European countries including Britain.

"Arriva's activities will strengthen Deutsche Bahn's strategic positioning in Europe, principally through Arriva's successful targeting of Europe's increasingly liberalized and fast-growing transport markets which are of strategic interest to Deutsche Bahn," said Ruediger Grube, CEO of the German bus and rail company.

Deutsche Bahn said that Arriva would be operated as a wholly owned subsidiary.