Deutsche Bahn, the largest state-owned railway organisation in Germany, has announced plans to take over CrossCountry operator Arriva.

The £1.54 billion deal, announced earlier this week, is presently undergoing negotiations with an offer anticipated by close of business on Friday.

The CrossCountry franchise, which operates between a number of UK cities and towns outside of London, was declared a loss-making venture by Arriva in February this year. The group at the time said that despite the declining revenue, they were waiting to see the results of a government subsidy scheduled for later in 2010. Arriva also runs a number of other services apart from the rail franchise, including transport options to a dozen other European countries.

The CrossCountry network is centred on Britain’s second largest city Birmingham and features connections from Penzance all the way to Aberdeen, with the Southeast, Midlands and Wales all on the system.

The initial offer, during last month’s talks, from Deutsche Bahn was at 700p per share, roughly equivalent to £1.2 billion. However, this was dismissed as too low by the major Arriva shareholders, leading the German outfit to come back with an offer of 775p per share. A final dividend of 18.8p per share will also be forthcoming to Arriva shareholders upon completion of the deal. On the back of the announcement, Arriva shares rose by 3.3 per cent to close at 760.5p.