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Arriva lands in Eastern Europe - extended

British bus and rail operator Arriva said on Monday it had entered the Hungary and Slovakia markets for the first time with a £25 million ($49 million) acquisition.

The company, which now operates in 12 countries across Europe, said the purchase of 80% of Hungary’s Eurobus Invest would help it capitalize on the privatization of the country’s regional bus sector through a joint venture company VT-Transman, and in Slovakia operates through two 60% owned subsidiaries, SAD Nova Zamky and SAD Michalovce. A spokesman said, that the firm was likely to continue on the acquisition trail as it seeks to add scale in its existing markets.

It will help with predictions from Arriva - which employs 1,800 people in the North-East - that it will double the size of its mainland Europe operation by 2011. And it is a further coup for the company’s thriving bus division, which saw its profits increase 16% to £87.9 million last year. The company made its first inroads into the emerging economy last year by winning contracts in Poland and the Czech Republic. Group-wide, Arriva saw a 7% increase in profits to £128 million for last year, despite battling rising fuel costs and bidding for three rail franchises, and said this year - buoyed by its recent acquisition - promises to be even more successful.

CEO David Martin said there was scope for opportunities in Hungary and Slovakia. “This is a significant milestone for Arriva to enter two new markets with a business that is ready to develop the opportunities arising in those countries, and contribute to Arriva's European growth story,” he said. “It builds on last year’s entry into Poland with a tender win and acquisitions in the Czech Republic, further consolidating Arriva's position in new markets.” (Reuters, The Northern Echo, UK)