Channel Tunnel operator Eurotunnel is buying the UK's third-largest rail freight operator, GBRf, from UK transport company FirstGroup for Ôé¼26.3 million.
GBRf hauls many of the container trains that leave the UK's major ports and also has major heavy haul operations moving coal and other bulk freight, though it does not currently operate any cross-Channel services.
Eurotunnel plans to combine GBRf with its Europorte unit, which it bought from Veolia last year.
Europorte owns 11 Class 92 locomotivesÔÇöthe only kind permitted under current rules to haul freight through the tunnel. Eurotunnel is expected to use some of GBRfÔÇÖs fleet of 41 existing locomotives to haul trains to and from the tunnel.
GBRfÔÇÖs customers include the French electricity giant EDF, the UKÔÇÖs British Gypsum and DRAX. Its annual sales are around ┬ú55 million, with a net profit of around ┬ú5 million. The company employs 299 people.
Commenting on the announcement, Jacques Gounon, chairman and chief executive of Eurotunnel, said: ÔÇ£Eurotunnel has always been a major link between the UK and France. The acquisition of GBRf is a further expression of our commitment to the United Kingdom and of our confidence in the potential that it holds.
ÔÇ£Growing concerns about the environment and the increasing need for freight transport over both long and short distances mean that rail freight is a buoyant market.ÔÇØ
Cross-Channel rail freight traffic has declined from a peak of about three million tonnes per year to just 1.1 million tonnes last year.
However the rail freight market within the UK is one of the most developed in Europe, with annual growth between 1995 and 2008 averaging four per cent.
The combined size of the French and UK freight markets is around 75 per cent that of Germany, the market leader. Eurotunnel has a market share of about three per cent of French rail freight, and acquiring GBRf will give it about the same in the UK market.
GBRf competes with market leaders EWS, which belongs to German rail company Deutsche Bahn, and UK-based Freightliner Group.
FirstGroup, which has owned GBRf since 2003, said it would use the cash to further reduce its net debt. The company is the leading transport operator in the UK and North America with revenues of over £6 billion a year. It employs more than 130,000 people and transports approximately 2.5 billion passengers a year. 
