Disposal of Arriva vehicle rental

Arriva plc (“Arriva”), the European transportservices group, has agreed the sale of its car and commercialvehicle rental division, Arriva Vehicle Rental (“thebusiness”), to Northgate plc for an estimatedconsideration of £129 million, representing a surplus overnet assets of approximately £23 million.

Completion of the transaction is subject only to a share placingby Northgate becoming unconditional, and is expected to take placein the next few days.

The disposal of the business is part of Arriva's strategy ofbeing focused on the passenger services markets in the UK andmainland Europe. The proceeds will be applied initially towardsrepayment of debt and will significantly strengthen the balancesheet at a time when the Group is pursuing acquisition andfranchise opportunities that will strengthen its presence in keymarkets.

Bob Davies, Arriva's chief executive said:

The sale of Arriva Vehicle Rental is at the right priceand the right time. It enables us to focus even more strongly ondeveloping our passenger services businesses. Our strategic goalremains recognition as the number one transport services providerin Europe, where we see substantial scope for profitableinvestment. Northgate is ideally placed to take the AVR businessforward, as the UK's leader in commercial vehiclerental.

Arriva Vehicle Rental operates from 33 branches in England andhad a fleet of more than 11,000 vehicles at 31 December 2005. Inthe year to 31 December 2004, the business made an operating profitof £12.6* million on revenue of £59.0* million. In thesix months to 30 June 2005 it made an operating profit of £5million on revenue of £27.9*m. Divisional net assets at 31December 2004, were £105.1m. The estimated total cashconsideration consists of £53.9m for the shares and, aftersettlement of intra-group balances and payment for certain assetsowned by other members of the Arriva group, assumption of£75.4m of debt. £4.2m of the consideration is deferreduntil 30 June 2006. The final consideration is subject toconfirmation through completion accounts to be prepared subsequentto the disposal. Arriva Vehicle Rental Limited, at 31 December2004, reported gross assets of £167.8m. After eliminatingintra-group items, and including the assets referred to above,gross assets were £124.m.

*restated for the introduction of International FinancialReporting Standards ("IFRS").