Transport tie-up

Stagecoach and National Express agree £1.9bn merger

Stagecoach

Bus deal creates bigger group

National Express is acquiring Stagecoach in an all-share deal, creating a company worth around £1.9 billion based on their current market capitalisations.

Under the terms of the deal, accepting Stagecoach shareholders will get 0.36 of a new National Express share for each share held, as previously flagged. Stagecoach shareholders will own around 25% of the combined company upon completion.

The two companies said on 21 September that they were in merger talks.

The deal values Stagecoach at £468m and on completion its chairman Ray O’Toole will become chairman of the combined group’s board, while National Express’s Jorge Cosmen will be deputy chairman.

Ignacio Garat and Chris Davies will be chief executive and chief financial officer of the combined group respectively, as announced in September.

The deal marks the end of a 30-plus year journey for Perth-based brother and sister Brian Souter and Ann Gloag, who established the business and built it into a multinational transport group embracing buses, trains and ferries. Neither has day-to-day involvement in the company.

Sir Brian and Dame Ann have been selling shares but retain 25% of the company. They plan to reduce their stake to 5% each over ten years.

Today’s deal will mean about 50 roles will be cut across the head offices, IT and corporate departments of the two firms, as well as some overlapping senior management positions. This will cut annual costs by at least £45m.

The companies stressed there would be no front-line job losses or depot closures.

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