National Express and Stagecoach groups merger announced

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In a major shake-up of the geography of the coach and bus industry, Stagecoach and National Express look set to merge their operations in the UK

After protracted deliberations, and subject to shareholder approval, the Boards of National Express and Stagecoach announced on Tuesday 14 December that they believe the combined group proposal should go ahead, to bring the a number of group-wide benefits:

  • To build scale and relevance in an increasingly ‘bus-friendly’ UK market, supported by the £3 billion National Bus Strategy for England as well as measures in Scotland and Wales;
  • To facilitate an acceleration of the expansion of National Express’ growth businesses across the UK, such as commuter, shuttle, private hire coach and accessible transport across Stagecoach’s footprint, as well as deliver other growth and revenue synergies;
  • To expand across the UK’s large urban areas, whilst continuing to enhance strong relationships with key public sector stakeholders and city partners who are aligned on the need for modal shift;
  • To implement ‘industry-leading’ environmental and sustainability solutions at scale to deliver high quality, zero-emission public transport, driving customer demand and playing a critical role in delivering Government priorities for cleaner, greener and more resilient economies, and;
  • To deliver significant operational efficiencies across the combined UK networks, with, for example, National Express coaches utilising Stagecoach’s well-located depot network to run and maintain its coach operations;
  • To bring the ‘best of both’ from the combined capabilities of two high quality operators with well-aligned values and collaborative cultures, whilst also delivering significant benefits to customers and passengers, across key aspects of the business including on-board technology and safety; scheduling, network and route planning; and congestion management.

In addition, the National Express Board said that it is confident of the combined group realising significant growth and revenue synergies, as well as utilising the expanded UK bus footprint to optimise sales and marketing. Following completion of the merger, Stagecoach shareholders will own approximately 25% and National Express shareholders will own approximately 75% of the new combined group.

Ignacio Garat, Chief Executive Officer of National Express commented: “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. The combined group will also benefit from the significant growth and cost synergies and a stronger balance sheet to significantly accelerate growth investment across our diversified international portfolio, aiming to deliver attractive sustainable returns to shareholders.”

Martin Griffiths, Chief Executive of Stagecoach added: “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.”

Upon completion of the merging of the two groups, it is intended that Ray O’Toole, current Chairman of Stagecoach, will become Chairman of the Board of the new combined group, leveraging his prior experience across both businesses, with Sir John Armitt CBE stepping down, having been Chairman of National Express since February 2013.

Jorge Cosmen, Deputy Chairman of National Express, will become Deputy Chairman of the Board of the combined group. Ignacio Garat and Chris Davies, CEO and CFO respectively of National Express, will become CEO and CFO respectively of the new group, whilst its Board will comprise a combination of National Express and former Stagecoach directors, approximately in proportion to the expected ratio of the new ownership. Gregor Alexander and Lynne Weedall, currently independent non-executive directors of Stagecoach, will join the Board and become chairs of the combined group’s Audit Committee and Remuneration Committee respectively.

Tom Stables, CEO of National Express UK and Germany, will become CEO of UK and Germany for the newly combined group, and Carla Stockton-Jones, presently UK Managing Director of Stagecoach, will become its Managing Director of UK Bus.
A potential barrier for the combination has been removed by selling megabus UK and Stagecoach’s South West Falcon’s marketing and customer service activities along with its 35% share in Scottish CityLink to ComfortDelGro, although Stagecoach will still operate the service, along with independent operators, under contract to the new owners. See page 8 for more details.

National Express and Stagecoach will seek approvals for the combination from the UK Competition and Markets Authority in regards to the overlap of operations in the Midlands, where some Stagecoach in Warwickshire and National Express Coventry services compete on the same corridor. Both groups will also seek approval from shareholders, meaning that completion of the deal is not expected until the end of 2022.

The combined groups will seek approval from the UK Competition and Markets Authority in regards to the overlap of operations in the Midlands, where both companies compete on the Coventry to the University of Warwick corridor. RICHARD SHARMAN













It is believed that the Stagecoach brand will be retained, and repaints into the new livery will continue. RICHARD SHARMAN