National Express/Stagecoach merger agreed
National Express and Stagecoach have agreed on the terms of a recommended all-share combination of the two businesses. It sees National Express buy Stagecoach at around £470m.
The boards of the two transport giants agree the combination is a ‘highly compelling strategic proposition’ with significant growth and cost synergies. They believe that the Combination will result in a Combined Group that has attractive growth, margins and cash flow generation potential, capable of generating strong and sustainable returns for shareholders. It is expected to bring significant growth and revenue synergies. The latter includes accelerating the expansion of National Express’s growth businesses across the UK, as well as utilising the expanded UK bus footprint to optimise sales and marketing.
The Combined Group is expected to have a fleet of around 40,000 vehicles, a workforce of approximately 70,000 people, and with more than a billion passenger journeys made annually on its services. Following completion of the agreed combination, Stagecoach Shareholders will own approximately 25% and National Express Shareholders will own approximately 75% of the Combined Group on a fully diluted basis.
Bus and Coach Buyer first reported on the potential for the deal in September.
“The proposed combination of National Express and Stagecoach, and the unique strengths of both companies and their teams, will create a leading multi-modal passenger transport business in the UK” – Ignacio Garat, Chief Executive Officer of National Express
Ignacio Garat, Chief Executive Officer of National Express, said: “The proposed combination of National Express and Stagecoach, and the unique strengths of both companies and their teams, will create a leading multi-modal passenger transport business in the UK, aiming to deliver superb services to customers and forging the way to a carbon free future with a new generation of zero-emission buses and coaches.”
“Our companies have a shared vision around helping to build more sustainable communities and secure a net zero future” – Martin Griffiths, Chief Executive of Stagecoach
Martin Griffiths, Chief Executive of Stagecoach, said: “Our companies have a shared vision around helping to build more sustainable communities and secure a net zero future. We also both have a strong track record of investing in our people and in our services to deliver sector-leading customer service, operational excellence and great value travel. This is an exciting opportunity to bring together two of the UK’s iconic transport brands to create a strong, diverse business that is well-placed to grow the market for greener and smarter public transport for the benefit of all stakeholders.”
The deal follows a hostile takeover attempt in 2009, when Stagecoach made moves to buy out National Express, who at the time was heavily-indebted.
Stagecoach has also made sales of its coach operations following the announcement of the National Express merger; find out more here.