An American multinational investment firm is in exclusive talks to buy Arriva Group – the parent company of embattled rail franchise Northern Rail – according to reports.

According to Sky News, private equity, alternative asset management and financial services corporation Carlyle are in pole position to by Arriva in a deal worth around £2.16 billion.

As reported by in-Cumbria in March, Arriva’s owners Deutsche Bahn AG (DB) said it was exploring options for a sale in an attempt to curb an increase in its debts.

BD bosses challenged its management team to “assess the option of selling up to 100 per cent of the shares in Arriva to one or more investors, and the option of an IPO” or initial public offering.

However, an insider has told Sky News that the Northern Rail contract would not be part of the any takeover by Carlyle.

Arriva, through its subsidiary Northern, runs rail services throughout Cumbria as well as bus services between Carlisle and Newcastle.

Northern has caused huge controversy in Cumbria and the wider region in the past 18 months.

The launch of a new timetable in May 2018 resulted in one in ten Northern trains cancelled every day, while remaining services were “significantly delayed and overcrowded.”

Despite Northern introducing reduced peak time fares and pledging brand new trains, with the Furness and Lakes Lines set to be the first to receive them, rail groups and MPs have launched scathing attacks on Northern for its performance.

And last month transport secretary Grant Shapps warned the controversial contract could be nationalised in light of Northern’s poor performance – a month that has been backed by Transport for the North.

Sky News understands a formal bid will be tabled this month, with DB’s board to consider the offer in December, with uncertainty over the outcome of Brexit set to be a consideration.

Its sources claim Carlyle is the "clear frontrunner" should DB seek an outright sale.

But it remains unclear if the reported £2.16bn offer will be enough for DB, who are understood to be seeking bids in excess of £2.6bn for Arriva.

And it leaves question marks over the future of the Northern Rail contract.

Arriva, which is headquartered in Sunderland, generated revenues of 5.44 billion euros last year and employs 53,000 people across Europe.

DB acquired 100 per cent of shares in Arriva in 2010.