Arriva in talks with SNCF on Keolis tie-up

LONDON (Reuters) - Transport group Arriva has held talks with France’s state railway group SNCF, about a possible equity link-up with its transport unit Keolis.

“Arriva confirms it has held very preliminary discussions with SNCF regarding a possible contribution of all or part of Keolis’ transportation business to Arriva to create a significantly enhanced and leading European transportation business,” Arriva said on Thursday.

“The board affirms that discussions are at a preliminary exploratory stage and there is no certainty that any agreement will be reached.”

Shares in Arriva were 6.3 percent up at 497.30 pence by 10:10 a.m., valuing the group at around 930 million pounds.

Arriva last month said 11-month revenues had grown in its bus and train businesses and that cost cutting measures would offset higher fuel costs.

Keolis had 2008 sales of 3.17 billion euros and a staff of nearly 40,000.

Reporting by Rhys Jones