National Express, a British multinational public transport company, has reportedly confirmed that it is in talks to buy rival Scottish transport group, Stagecoach. According to credible sources, National Express will hold around 75% of the merged group under the terms of the deal, with Stagecoach holding 25%.
National Express stated that the merger would allow it to save expenses and that the newly created firm would save at least £35 million.
During the Covid-19 pandemic, passenger traffic has been significantly reduced due to travel restrictions and fewer commuters.
National Express, which operates bus and coach services in the United Kingdom, the United States, and Spain, saw its revenues drop to £990 million in the six months ending June 30, 2021, from £1.03 billion it was a year prior.
Due to the negative impact of the Covid-19 crisis, Stagecoach, the UK's largest bus operator, also saw revenues decline to £928 million in the year to 1st May, down from £1.4 billion in 2020.
Both companies stated that the proposed combination would bring together ‘the best of both’ these enterprises.
If the discussions are successful, Chairman of Stagecoach, Ray O'Toole would take the position of chairman of the newly created group's board, and National Express CEO, Ignacio Garat, would take over the position of the CEO.
According to the companies, the agreement would also enable National Express to utilize Stagecoach's UK depot infrastructure for its coaches, and develop other areas of its operations such as private coach hiring, corporate shuttles, and accessible modes of transportation.
The companies identified a number of areas where they planned to save money, such as collaborating on vehicle repair and maintenance, merging some timetables and routes, and maybe selling office space.
If the merger is authorized, National Express acknowledges that it would incur one-time expenses of up to £40 million in the first two years.
Source credit: https://www.bbc.com/news/business-58636437