TRANSPORT group Arriva made another European acquisition yesterday.

The company, based in Sunderland, is paying £17.5m for one of Germany's largest privately-owned bus companies.

Sippel Group, which runs public transport in the Rhine-Main area, which includes Frankfurt, Mainz and Wiesbaden, also provides scheduled services to private sector customers that include Frankfurt Airport.

The move comes only two months after Arriva said it planned to double its operations in mainland Europe during the next five years.

The rail and bus operator said it wanted to double sales on the Continent from £500m to £1bn.

It operates businesses in seven European countries, including Denmark and Spain, and has identified Eastern Europe as one of its potential markets.

Arriva, which is already active in the German rail market, is hoping to take advantage of a trend towards competitive tendering in the country's bus market. The Rhine-Main public transport agency has begun contracting-out bus services and is expected to put all regional routes out to tender in the next few years.

Sippel had a £22.8m turnover and pre-tax earnings before interest and goodwill of £3.7m in 2003.

Arriva entered the German transport market last April when it acquired rail company Prignitzer Eisenbahn Gruppe, which runs regional rail services in the federal states of North Rhine-Westphalia, Brandenburg and Mecklenburg-West Pomerania.

In October, it bought a 76.9 per cent stake, now increased to 89.8 per cent, in Regentalbahn, which runs regional passenger rail services in Bavaria, Thuringia and Saxony as well as joint services with the Swiss and Czech state railways.

Chief executive Bob Davies said the German public transport market was the largest in Europe and Sippel had an excellent reputation.

"This acquisition allows us to participate in future tenders for bus services in one of Germany's most important economic regions," he said.

The group's next acquisitions could be in Scandanavia, where it began its European expansion.

It has been examining the Swedish market, where a price war that made transport unprofitable is coming to an end.

It already operates bus services in Copenhagen, Denmark, and six train lines in Jutland, Denmark. Transport opportunities are also expected to increase in Norway next year.