The London red bus operator Arriva has been snapped up by US infrastructure investor I Squared in a deal believed to be worth about €1.6bn (£1.4bn). Arriva was put up for sale in 2019 by its German owner, Deutsche Bahn, which had originally sought to offload the company to reduce its own debts. While the terms were not disclosed, Deutsche Bahn is understood to have sold Arriva for about €1.6bn, including debt. There have been significant efforts to stabilise the business after the Covid pandemic, which brought most public transport to a halt. The value of the deal suggests Deutsche Bahn – which has been described as being in a state of “permanent crisis” by Germany’s national audit office – made a loss on the sale, having paid €2.7bn for Arriva in 2010. The transaction is expected to be completed next year. Arriva, which is headquartered in Sunderland and employs more than 34,000 people, operates bus and rail services across 10 European countries including the UK, where it is one of the largest train operators and runs a 4,700-strong fleet of buses across the country including some of London’s doubledecker red buses. It operates the London Overground rail network, as well as the Chiltern Railways and CrossCountry franchises and has more than 18,800 staff in the UK. A spokesperson for I Squared – which is headquartered in Miami – said the US private equity firm had committed €2bn to expand and electrify Arriva’s fleet after its takeover, with a significant portion of those funds expected to be spent on its UK operations. Last year, I Squared’s £1.2bn bid for FirstGroup was rejected on the basis it undervalued the UK rail and bus operator. The Arriva Group chief executive, Mike Cooper, said the deal would give the company “a new lease on life”. The Deutsche Bahn chief financial officer, Levin Holle, said he was happy that the new owners were “willing to support Arriva in its future growth”. Arriva will be added to I Squared’s growing list of European investments, which include the UK power generating companies Conrad Energy and Aggreko, and contribute to its $37bn (£30.5bn) in total assets. Cooper said: “This is a great opportunity for Arriva and the start of an important new chapter for our business. I know that the team at I Squared share our belief in providing sustainable transport services that cater for the needs of tomorrow, as well as the pressures of today.”