Stagecoach will continue to a number of the services as a contractor
Stagecoach Group has announced the sale of the retail operations of its Megabus.com Europe business to rival operator FlixMobility GmbH, more commonly known as FlixBus.
Only the Megabus.com retailing operations involving mainland Europe are part of the agreed sale.
The Megabus.com Europe business comprises both retailing activities and coach operating activities. The retailing activities involve the design of inter-city coach services, including their timetabling, co-ordination and marketing, as well as the pricing and sale of journeys on those services.
The coach operating activities encompass the day-to-day operation and staffing of the coach services.
Stagecoach has agreed the sale to FlixBus of the retailing part of the business, and will continue to operate a number of European inter-city coach services as a contractor to FlixBus. Stagecoach said it looks forward to building on the relationship between the two companies.
The sale of the Megabus.com Europe retail operations completed on July 1, 2016. In addition, Stagecoach has agreed that it will dispose of a number of vehicles to FlixBus, or its nominee, at a future date.
Stagecoach said the agreed amount of the consideration for the sale of the retail operations will be satisfied by the issue of a loan note from FlixBus to Stagecoach at completion. Stagecoach expects the loan note to be fully settled by the end of 2017.
Payment of the loan note is not subject to any conditions or performance criteria which need to be fulfilled.
Stagecoach said it expects to report a gain on disposal in respect of the sale in its consolidated financial statements for the year ending April 30, 2017.
Existing customer bookings for Megabus.com Europe journeys remain valid and these services are continuing to operate as normal.
A Stagecoach spokeswoman told CBW: “FlixBus has the rights to use the Megabus.com brand in Europe should they choose to, but that will be a decision for them.
“Our operating bases in mainland Europe are continuing to run as normal as we are still running our existing network. However, we are now doing it on behalf of FlixBus. Ultimately it will be up to FlixBus to decide what that network looks like over the longer term.”
On why the retail operations were sold, the spokeswoman added: “We built up a good footprint and recognised brand within mainland Europe over a short space of time. We have always been clear that there would be consolidation in the inter-city coach market in Europe, which has continued to be a highly-competitive environment.
“Against that background, we undertook a review of the strategic options for Megabus.com to decide on the best way forward for our business. We concluded that a sale of the retailing part of the Megabus.com Europe business would realise value from our investment.
“We are pleased that we will continue to operate European inter-city coach services as a contractor to FlixBus.”
Stagecoach CEO Martin Griffiths commented: “We have confirmed the sale to FlixBus of the retailing part of Megabus.com Europe.
“I am pleased that we will continue to operate a number of European inter-city coach services as a contractor to FlixBus and we hope to build on that new relationship.”