TRANSPORT company Arriva has acquired 49 per cent of an Italian bus operator for £19.4m.

The acquisition of the stake in SAF will boost Arriva's position in the Italian transport market.

It also has the option to buy a further 11 per cent of the bus service operator by December 2006.

SAF employs 600 people and has a fleet of nearly 500 vehicles.

Arriva, which is based in Sunderland, first entered the Italian market in July 2002 with the acquisition of SAB, the country's largest private sector bus company, which also operates in northern Italy.

Arriva chief executive Bob Davies said: "This is an excellent opportunity to develop our business in Italy, which has one of the largest public transport markets in Europe.

"We are well positioned to benefit from the growing opportunities in both the bus and rail sectors and we look forward to working with the management and employees of this successful business."

Following the announcement that it had entered the German rail market last month, Arriva operates in eight member states of the European Union, with significant operations in the United Kingdom, the Netherlands, Denmark, Portugal and Italy.