Deutsche Bahn is to buy UK train and bus operator Arriva for £1.59bn in a deal that will create one of Europe’s largest transport groups. The move comes as part of the German group’s plans to expand beyond its domestic market, as well as a shift towards consolidation within European transport.

Deutsche Bahn operates Germany’s national rail services, as well as Chiltern Railways and freight rail services in the UK. Arriva runs rail and bus services in 12 European countries.

Chief executive Rudiger Grube said he expected the would help Deutsche Bahn expand beyond Germany and tap into Europe’s “increasingly liberalised and fast-growing transport markets”.

He expected the newly merged group to eventually be one of the few leading transport companies operating in Europe.

Arriva’s chairman Sir Richard Broadbent said the £1.59bn deal “fully reflects the value of the business”. However shareholders must now give their approval for the deal to be proceed.

The takeover has been on the cards for months amid as European transport industry heads towards consolidation.

Earlier this year takeover talks between Arriva and France’s train operator SNCF broke down.