Renfe has announced it will acquire 50 percent of Czech private rail operator Leo Express which will allow Spanish company to enter on the market of Czech Republic, Slovakia and Poland and secure the resources and licenses to access the German market.
Currently, the company is finalising the necessary processes including the authorisation of the Ministry of Finance. The transaction which would not exceed half the capital of the Czech railway operator is a strategic business opportunity for Renfe, which seeks to establish alliances and open new business outside the Spanish market.
As a result of the current process of liberalisation of the railway sector, Renfe has set itself the objective in its Strategic Plan to achieve a greater degree to access international markets. Renfe’s entry as a main partner in the shareholding of Leo Express has a direct benefit for the Spanish company, such as having activity in three more European countries.
Leo Express is a private company that started operating in 2012 in the Czech Republic, and since then, has been developing its business through the extension of its services in countries such as Slovakia and Poland, as well as with the award of PSOs tenders in the Czech Republic, which is one of the areas where they seek to grow.
In Germany, since 2017, a long-distance open access service has been operating for FlixTrain between Berlin and Stuttgart. In addition, with the aim of feeding its rail services through the train – bus connection, the company has operated various road connections in the Czech Republic, Slovakia, Austria, Poland and Ukraine.
In 2019, the number of Leo Express passengers increased by more than a third and exceeded 2.4 million. The company’s turnover exceeded CZK 1 billion (EUR 40 million), 25% more than previous year.
The strategic acquisition also allows Renfe to apply for public service obligation (PSO) tenders in Germany, the Czech Republic and Poland, with local implementation capacity, experience, equipment, or references in these countries, often essential to be able to compete. Renfe would also be better positioned to access the high-speed projects planned in the region.
The transaction is a new step of Renfe’s access to the international rail market after has been awarded the Maya Train in Mexico and a contract in Texas to operate the future Dallas – Houston high speed railway line. The company plans to enter the French market for transport services on the railway connections between Lyon, Montpellier and Marseille. The Spanish company is also targeting the Baltic region for the operation of the Rail Baltica route, between Estonia, Latvia and Lithuania. Renfe will also start the commercial operations for Medina – Mecca high speed rail from March 31.
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