Finnish state-owned railway company VR Group has agreed to acquire the Swedish branch of passenger transport firm Arriva Group to expand its operations in Sweden.

Arriva Sverige handles urban transport in Stockholm, as well as regional transport in southern and south-eastern Sweden.

The company serves more than 170 million passengers a year and is said to be the third-largest train operator in Sweden.

It generated revenues of more than €300m last year.

Under the terms of the deal, around 3,800 employees from Arriva Sverige will join VR Group.

Arriva Sverige CEO Johan Lindgren said: “As a veteran in the transport business and a pioneer in climate-friendly commuting services, VR Group can provide Arriva Sverige with great growth opportunities.

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“We look forward to the opportunity to utilise VR Group’s expertise and to developing our electric bus traffic together with VR Group.”

The acquisition will allow VR Group to enter a market that is considerably larger than Finland and supported by extensive public investments in rail traffic, infrastructure and public transport.

Arriva Sverige is also expected to help the company increase its competitiveness in rail and bus transport in both Sweden and Finland.

VR Group Passenger Services director Topi Simola said: “Arriva Sverige is a market leader in quality on the Swedish rail market and this will strengthen our competitiveness in the future rail competition also in Finland.”

The deal is expected to close in July this year, subject to customary closing conditions, including approvals from the German Ministry for Digital and Transport and the Deutsche Bahn Supervisory Board.

Once it is completed, Arriva Sverige will operate as an independent company under VR Group.

In 2020, VR Group won a ten-year contract from the Helsinki Regional Transport Authority in Finland to operate commuter services in Helsinki.

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