Trenitalia to acquire c2c franchise from National Express

National Express Group has announced that it has reached an agreement for Trenitalia to acquire the c2c franchise.

The c2c franchise acquisition by Trenitalia – the passenger rail transportation company part of FS Italiane Group – from National Express is conditional upon final consent from the Department for Transport. However, go ahead is expected to occur within the next three to four weeks. The agreement is expected to be in the region of £70 million providing National Express with a small net profit.

c2c franchise acquisition expected to be worth £70 million

The agreement follows initial partnership discussions regarding future franchise bidding. The board of National Express believes the offer made by Trenitalia UK represents the best, and a fair, deal for its shareholders.

According to Trenitalia, it has decided to invest in UK rail on the basis of the market’s strength and potential for growth, particularly in light of the Secretary of State for Transport’s recently announced vision for reform.

The acquisition is the first step in Trenitalia’s plans to expand in the UK rail passenger market, in line with the internationalisation plans of the entire FS Italiane Group. In December 2015, Trenitalia became the first new entrant to be awarded a “PQQ Passport” by the Department for Transport and since then has been pursuing a number of franchise opportunities.

Trenitalia has committed to retaining c2c’s existing management and staff and will continue to deliver existing plans for the franchise.  The operator will also invest in further improvements such as innovative technologies which are at the heart of its strategy for the franchise globally.

Dean Finch, CEO of National Express Group, said: “National Express has been immensely proud of c2c’s transformation on our watch. From converting c2c into the UK’s consistently best performing franchise, we have also recently pioneered customer service standards with automatic delay compensation and flexi-season tickets, for example. While this has, therefore, not been an easy decision, the board believes the transfer of c2c to Trenitalia UK presents opportunities for all concerned.

“We have been impressed by the commitment and interest shown by Trenitalia and are grateful for the support shown by DfT in this process. Trenitalia has significant rail credentials and is excited by the opportunity to invest in the new agenda set out by the Secretary of State. For National Express, while not ruling out participating in future UK rail bids, this allows us to pursue further growth opportunities in the markets where we have seen strong returns in the recent years.”

Barbara Morgante, CEO of Trenitalia, ADDED: “We see significant chances to invest in UK Rail and this in principle agreement with National Express allows us to foster these ambitions. This is why we are extremely delighted to have this exciting opportunity to run the UK’s consistently best performing railway and serve the people of East London and South Essex. We will work closely with customers and local stakeholders to apply our vision and deliver improvements that will be visible and valuable; we are confident that British customers will benefit from our skill and capabilities developed in the highly competitive Italian market.

“We are also closely monitoring the Railways Franchising Programme as we intend to participate in tenders issued by the DfT to strengthen our presence in UK.”