The talks cover a full range of co-operation options, such as joint projects or the acquisition of EWS shares by Deutsche Bahn, EWS said in a statement.

'Freight traffic in Europe is growing and the increasingly competitive and liberalised rail freight sector is expanding and providing sustainable transport solutions,' EWS said. 'Deutsche Bahn and EWS's European network solution will be a key part of this growth.'

EWS is owned by Canadian National Railways Co, New Zealand merchant bank Fay Richwhite and US investment groups Berkshire Partners and Goldman Sachs Group Inc.

The German state owns all of the shares in Deutsche Bahn, although a partial privatisation and flotation is scheduled for the first half of 2008, company chief executive Hartmut Mehdorn reiterated earlier this week.

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Deutsche Bahn mulls buying rail operators EWS, Transfesa - report

AFX News Limited: 05.30.07

FRANKFURT (Thomson Financial) - Deutsche Bahn AG is considering spending up to 500 mln eur to acquire rail freight operators English, Welsh and Scottish Railway Holdings Ltd (EWS) and Spain's Transfesa, Financial Times Deutschland reported without citing sources.

Yesterday, EWS said it is in talks with Deutsche Bahn about developing a joint European rail freight network. The talks cover a full range of co-operation options, such as joint projects or the acquisition of EWS shares by Deutsche Bahn, EWS said in a statement.