By Emma-Victoria Farr, Andres Gonzalez and Markus Wacket
FRANKFURT/LONDON (Reuters) - Miami-based infrastructure investor I Squared Capital aims to sign a deal to acquire Deutsche Bahn's international transport business Arriva as soon as Monday, three sources familiar with the matter told Reuters.
The deal would value Arriva, which operates red London buses and train services in the UK, at around 1.6 billion euros ($1.68 billion) including debt, the sources said.
However, while the deal is nearing final stages, the sources cautioned that the timing could still shift. Given that Arriva's business operations still need to be carved out of the German train operator, the execution and closing of the deal will take several more months to complete, the sources added.
The Financial Times was first to report the news late on Thursday. I Squared declined to comment.
Deutsche Bahn said in an emailed statement: "We want to sell DB Arriva by the end of 2024. This process is ongoing and we have made good progress this year and last year."
Reuters reported in April that British transport company FirstGroup and I Squared had been weighing competing bids for parts of Arriva. I Squared entered into exclusive talks with the company in August, according to press reports.
Arriva transports 1.5 billion rail and bus passengers a year with operations across 10 countries and more than 34,000 employees, according to its website.
The German state-owned railway company has attempted selling parts of Arriva in the past to raise cash to lower its debt and invest in its domestic infrastructure.
Arriva has a significant presence in the UK, where it runs buses and trains across networks including London's Overground and Cross Country franchises.
The unit has struggled with profitability, with an adjusted operating profit of 12 million euros last year, up from an operating loss of 73 million euros the year before, according to Deutsche Bahn's latest annual report.
Its annual sales rose to 4.2 billion euros in 2022, making up 7.5% of Deutsche Bahn's total revenue.
($1 = 0.9504 euros)