According to the report, Deutsche Bahn will pay up to 170 million euros for the acquisition.

Deutsche Bahn's competitors for Laing Rail included Dutch Ned Rail and French SNCF, the newspaper said, adding that the German rail operator plans to expand its UK passenger operations further.

Laing Rail is part of John Laing, which was bought in 2006 by private equity group Henderson Global Investors.

Laing Rail operates Chiltern Railways, described by the paper as one of the best-regarded UK train operators. It also owns half of a company operating overground trains in London under the London Overground brand.

Deutsche Bahn is Europe's largest train operator.

See also:

Germany's Deutsche Bahn to buy Laing Rail

Reuters: Jan 20, 2008

BERLIN - German national rail operator Deutsche Bahn [DBN.UL] plans to spend up to 170 million euros ($249.2 million) acquiring Britain's Laing Rail, the owner of Chiltern Railways, a German newspaper said on Sunday.

Citing sources involved in the negotiations, the Financial Times Deutschland (FTD) said Deutsche Bahn would announce the takeover of Laing on Monday, according to the advance copy of an article due to appear in the paper's Monday edition.

Chiltern railways has a franchise to run passenger services northwest from London toward Birmingham until 2020. According to the FTD, it has an annual turnover of some 280 million euros.

The paper said Deutsche Bahn would be able to link Laing Rail with its British freight unit English Welsh & Scottish Railway Holdings (EWS).

EWS and Laing would have a combined turnover of around 1 billion euros annually, and Deutsche Bahn plans to use the new acquisition for further expansion in Britain, the FTD added.

Neither Deutsche Bahn, which the German government aims to partly privatise by the end of 2009, nor Laing were immediately available for comment.

Fund manager Henderson put the rail operations up for sale in September so that its project manager division, John Laing, can focus on its core infrastructure activities.

Britain's Go-Ahead Group and Arriva had said last year they would be looking at Chiltern, while National Express and Stagecoach and French bus and rail operator Keolis had also been seen as likely bidders. ($1=.6822 Euro)

See also:

Deutsche Bahn buys Laing Rail

Financial Times: January 21 2008
By Robert Wright, Transport Correspondent

Germany’s Deutsche Bahn is to become the latest European state-owned railway to enter the UK passenger market after it won the competition to buy Laing Rail, owner of the Chiltern Railways franchise.

The win, confirmed on Monday, marks success at the third attempt for the efforts by Europe’s largest train operator to enter the competitive sector. It previously considered but then rejected the possibility of a bid for the Scotrail rail franchise and also pulled out of a joint venture with the Stagecoach and Virgin groups for the InterCity East Coast franchise in 2004.

In the freight sector, DB last year bought EWS, the UK’s largest rail freight operator.

Laing Rail will be DB’s largest regional rail operation outside its German base. It has smaller operations in Poland and Sweden.

Chiltern, whose trains run from London Marylebone to Aylesbury, High Wycombe and the Midlands, has one of the longest UK rail franchises, a 20-year contract awarded in 2000. Laing Rail also has a 50 per cent stake with Hong Kong’s MTR Corporation in the London Overground concession, awarded last year, and a 50 per cent stake in the Wrexham, Shropshire and Marylebone Railway, which will start operations in the spring between Marylebone and Wrexham.

It is an open-access operator, running on a purely commercial basis without the franchise agreements held by most UK train operators.

DB refused to reveal how much it had paid for Laing, but the Financial Times’ sister paper, FT Deutschland, has reported it was preparing to pay €170m (£127m).

Laing had been put up for sale by Henderson Global Investors, which took John Laing group private after a takeover in December 2006. DB’s main competitor had been NedRailways, an arm of NS, the Netherlands’ state-owned train operator, which already has stakes in the operators of the Merseyrail Electrics and Northern rail franchises. France’s Keolis, part-owned by SNCF, the state-owned train operator, also has stakes in several UK train operators. Europe’s state-owned operators have been keen to gain experience of the privatised UK market to prepare for greater liberalisation at home.

Karl-Friedrich Rausch, chairman of DB’s passenger division, said the company would now for the first time be operating large-scale passenger services outside Germany.

“It will allow us to strengthen substantially our position in the European market, along with providing the basis for further growth,” he said.

Ulrich Homburg, chairman of the management board of DB Regio, the arm of DB to which Laing Rail will belong, said the acquisition would give DB great scope for further growth in the UK rail market.

“We intend to enter into a long-term commitment in the UK and make continuous investments in the quality of our services,” he said.

Chiltern is one of the UK’s most respected train operators, having experienced rapid traffic growth on a route that under the state-owned British Rail was run down and came close to closure.