EUROPE: Spanish national operator RENFE has announced its intention to acquire a 50% stake in central European open access operator Leo Express. RENFE said it sees a strategic opportunity to develop international business activities as Spain’s domestic market opens to competition.
The proposed acquisition announced on March 9 is still be finalised, and requires the authorisation of the Ministry of Finance.
RENFE said many other large European rail operators had entered new markets through acquisitions, with the purchase of an established business offering greater certainty than starting from scratch and taking less time than relying on organic growth.
Local capabilities
Privately owned Leo Express began operating in the Czech Republic in 2012, and has since developed a network of rail and coach routes serving more than 100 cities in the Czech Republic, Slovakia, Poland, Austria, Croatia, Hungary and Ukraine.
It has won tendered operating contracts in the Czech Republic, and operated open access inter-city services branded as FlixTrain in Germany in 2017-20.
It carried 2·4 million passengers in 2019 and generated revenues of €40m, with consolidated profit ‘in the range of tens of millions of koruna’.
RENFE said it sees a lot of potential for transport market development in the Czech Republic, Slovakia and Poland, including high speed rail investment. Leo Express would also provide it with local capabilities when bidding for tendered operating contracts, including potentially in Germany.
Internationalisation strategy
As part of its internationalisation strategy, RENFE has a contract to operate Haramain High Speed Rail services in Saudi Arabia.
It is also acting as shadow operator for the Texas Central high speed rail scheme in the USA, and supporting the development of Mexico’s Tren Maya project.
Elsewhere in Europe, it is developing plans to operate high speed services in France, and is part of a consortium bidding to act as shadow operator for the Rail Baltica project in Estonia, Latvia and Lithuania.
