TRANSPORT group Arriva announced the acquisition of 80 per cent of an Italian bus operator last night as it continued its breakneck-pace plan for expansion in Europe.

The Sunderland-based plc announced that it had bought the majority of the SAVDA Group for £9.4m and had the option to buy the remaining 20 per cent by 2008 for a maximum of £3.2m.

Arriva's new bus businesses are in the Piemonte and Valle D'Aosta regions of Northern Italy - to the west of its current operations.

SAVDA operates public transport buses as well as commercial, contract and private hire services.

The operations include a 50 per cent holding in Autostradale, which operates bus services in Lombardy and Piemonte as well as airport shuttles.

SAVDA turned over £22m last year and made pre-tax profits of £2.5m.

The businesses employ about 450 people and operate about 330 vehicles.

Arriva entered the Italian bus market in July 2002 when it acquired the SAB Group in Northern Italy.

In May last year it bought almost half of transport group SAF.

Bob Davies, Arriva's chief executive, said: "The Italian public transport market is one of the largest in Europe and competitive tendering is on the increase.

"This acquisition allows us to expand in an area of Italy which is strategically significant for Arriva and we look forward to working with the management and employees of this successful business."

Arriva is well on track to becoming the largest transport organisation in Europe. It already has operations in Denmark, Germany, Italy, the Netherlands, Portugal, Spain, Sweden and the UK.

Just last week Arriva won a six-year public transport contract in the Netherlands, which should bring in an annual turnover of about £120m.

Earlier this year, Arriva won two rail contracts in the Netherlands and Germany.

It also acquired one of Germany's largest privately-owned bus companies, Sippel Group, for £17.5m.

In January, Arriva announced that 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.