SNCF, the French national rail operator, will move closer to a £5bn-turnover merger with Arriva, the British Ftse 250 transport group, with the appointment of deal advisers this month.
Several investment banks, including Lazard, BNP Paribas and JP Morgan, are expected to pitch for roles. Arriva, which confirmed last month that it was in merger talks with the transport arm of SNCF subsidiary Keolis, is usually advised by NM Rothschild and Deutsche.
If the whole of Keolis were transferred to Arriva, the combined group would have sales of more than £5bn and a strong geographic reach in Europe. The groups are of similar size, so the move could double Arriva's market capitalisation from nearly £1bn. Arriva's confirmation statement said that talks were "preliminary", so the appointment of advisers suggests that negotiations are becoming more substantial.
Arriva shares closed at 491.1p on Friday, up 1.1p on start of day's trading. The Sunderland-based company employs more than 44,000 people in 12 European countries.