National Express agrees to sell rail franchise in £70m deal
BIRMINGHAM-based transport group, National Express has announced it is to sell its c2c rail franchise to in a deal expected to be worth £70m.
The company said the deal did not mean it was withdrawing from the rail sector but the proceeds from the deal are expected to be ploughed into core areas of the business.
The company said it had reached an agreement in principle for Trenitalia, the passenger rail transportation arm of FS Italiane Group, to acquire the c2c franchise, which operates in the south east.
Completion of the acquisition is conditional on final consent from the Department for Transport and is expected to occur within the next three to four weeks.
The £70m figure is expected to result in a small net profit for National Express.
National Express said that following initial partnership discussions regarding future franchise bidding, Trenitalia UK made an offer to the company that its board believed represented the best, and a fair, deal for its shareholders.
National Express said it remained proud of its record at c2c, where under its tenure services had been transformed to become the UK’s best performing rail operation.
While not ruling out participating in future UK rail contracts, National Express said it had seen significant growth in North America and continental Europe in recent years. National Express believes there are further opportunities for growth in these markets.
Dean Finch, CEO of National Express Group, said: “National Express has been immensely proud of c2c’s transformation on our watch. From converting c2c into the UK’s consistently best performing franchise, we have also recently pioneered customer service standards with automatic delay compensation and flexi-season tickets, for example. While this has, therefore, not been an easy decision, the board believes the transfer of c2c to Trenitalia UK presents opportunities for all concerned.
“We have been impressed by the commitment and interest shown by Trenitalia and are grateful for the support shown by DfT in this process. Trenitalia has significant rail credentials and is excited by the opportunity to invest in the new agenda set out by the Secretary of State. For National Express, while not ruling out participating in future UK rail bids, this allows us to pursue further growth opportunities in the markets where we have seen strong returns in the recent years.”