National Express set to acquire Stagecoach, reports suggest

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Coach operator National Express is in talks to acquire UK bus firm Stagecoach, which could result in a fleet of 36,000 vehicles operating across UK and Europe.

As reported in The Financial Times, Stagecoach shareholders would receive 0.36 new National Express shares for every Stagecoach share they own, handing them ownership of around 25% of the combined company.

The deal values Stagecoach at £445m, which is an increase of 18% on the closing price of its shares on 20 September. Industry sources have speculated that the merger could be a cost-saving exercise following a tough 18-months for both companies, as a result of the Covid-19 pandemic.

Stagecoach, the largest bus operator in the UK, runs services in Greater London, Scotland, Manchester and Sheffield, and owns a fleet of 8,400 buses.  Stagecoach also owns Megabus, which offers low fare travel between some of the UK’s biggest cities. National Express also runs long-distance bus services in the UK, as well as in Spain.

According to The FT, National Express is valued at around £1.5bn, though shares have been reduced since last March. Share prices have recovered since then but they have yet to hit the heights of January 2020.

Under the deal, Stagecoach chair Ray O’Toole would reportedly be chair of the new combined group, with National Express chief executive Ignacio Garat retaining his position.

The deal is not yet confirmed, even if both firms come to an agreement, the merger would have to be granted clearance from the Competition and Markets Authority

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