In a deal that was first discussed back in September; it was confirmed this morning that National Express have agreed to an all-share takeover of Stagecoach Group in a deal that makes a group values at £1.9billion.
Each share that Stagecoach shareholders hold will be worth 0.36 National Express shares; which based on pre-merger figures does represent a small profit. The entire Stagecoach shareholding will be worth 25% of the new combined groups shares.
I would expect the Competitions and Mergers Authority to at very least look at the arrangement and it might be that National Express and / or Stagecoach might have to concede some concessions for it to go ahead.
Ignacio Garat, CEO of National Express, will take his title to the new group. Stagecoach Chairman Ray O’Toole will likewise retain the title.
Coaches and Buses Under One Roof?
With the National Express acquisition of Lucketts two years ago, you could imagine some sharing of resources and talent, albeit I would suggest neither the Stagecoach depots or the Lucketts depots to see any immediate changes. Over time, I can see some outstation and cross-cover opportunities such as relocating the Botley Stagecoach outstation to Lucketts at Broadcut, or placing National Express coaches at Andover or Winchester.
One part of the local Stagecoach operations that won’t be going dealer white is the Megabus operation. Under part of the same package of deals, both Megabus and the Falcon coach operation in the South West has been acquired by ComfortDelGro. This international transport operator has purchased the “marketing, retail and customer service activities” of the Megabus coach business. This would assume they intend to maintain links with operators such as Yellow Coaches to actually run the service.
ComfortDelGro also bought out Stagecoach’s stake in Scottish Citylink Coaches. The combined purchase cost was £8.75 million.
Put Down the Paintbrushes
The rush to make everything NX Travel South will not happen overnight. Although the Stagecoach South brand is not necessarily subject to tainting that would make the brand itself something needing a purge. Across a number of sources, the logical answer was that National Express bus operations could revert to Stagecoach brands elsewhere in the UK.
The question might even be, are the operations currently subject to industrial action even worth salvaging? Off our patch (where there is no industrial action) Sheffield depot are threatened with an indefinite strike starting New Years Day. So that might be a battle ground where we should see what the new management are intending.
Titillating on Trains?
The question then would be whether the new engorged National Express Group has the desire, or the money, to look at the new national rail franchises. Rail management contracts are still evolving (or is that revolving) across many parts of the country as the Department for Transport makes decision over whether to use china or chocolate teapots for their next announcements.
There is a continuation of rail franchising or management in some form coming from the ashes of rail franchises like an asthmatic phoenix. Will collaborative working between National Express’s coach network and Stagecoach bus companies provide a more robust connection though?
Sir Brian winds down
At the end of all of this though, it has been on the cards for a while that Sir Brian Souter and Dame Ann Gloag are making their final throws of the dice. Alexander Dennis was another part of the industry he had investments and interests in; albeit that was sold off to the NFI Group in 2019.
It is a shame that there is not the investment there for one of the big groups to actually manufacture it’s own buses. National Express tend to lean towards a small number of coach models such as the Plaxton Elite in the north and the Caetano Levante more towards the south. That is a flight of fancy I think we can do without though.