Eurotunnel takes over rail freight company

Eurotunnel's move for GB Railfreight – which has been owned by

transport firm FirstGroup since 2003 – came as the firm looks to improve rail freight volumes through the Chunnel, which suffered in the recession.

GB Railfreight is the second major UK player in the sector to change hands in recent years after Germany's Deutsche Bahn bought rival EWS in 2007.

Eurotunnel chairman Jacques Gounon said the deal was "a further expression of our commitment to the UK".

"Growing concerns about the environment and the increasing need for freight transport over both long and short distances mean that rail freight is a growing market," he added.

Eurotunnel said GB Railfreight would complement its existing Europorte business in France and allow the firm to give customers a complete service on both sides of the Channel.

The UK rail freight market has grown by an average of four per cent a year between 1995 and 2008 when the recession took hold.

When First bought the business in 2003 as part of its acquisition of GB Railways it had revenues of 10m but this has grown to 57m in seven years.

The firm, whose clients include power companies EDF Energy and Drax, employs 299 staff.

FirstGroup chief executive Sir Moir Lockhead said the sale was "consistent with our strategy of focusing on our core business in the UK and North America".