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Stagecoach (SGC) soars on National Express (NEX) takeover

By Rob Griffin

14:00, 14 December 2021

Stagecoach logo on side of bus
The deal would require regulatory approval – Photo: Shutterstock

British transport group Stagecoach saw its stock price soar today on news it was being taken over by National Express.

In a joint statement to the London Stock Exchange, the two companies revealed they had reached agreement on an all-share deal.

The deal will create a £1.9bn industry powerhouse with a fleet of more than 40,000 vehicles and a workforce of 70,000.

Stock soars

The news was enough to send Stagecoach stock up 8.3% to 81.25p in early afternoon London trading, while National Express had a more modest increase of 1.24% to 238.11p.

The statement said the respective boards believed the combination was a “highly compelling strategic proposition” with significant growth and cost synergies.

The companies believe it will deliver “strong value creation for both sets of shareholders” as well as substantial benefits to the customers, employees and other stakeholders.

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Regulatory approval

The companies acknowledged in their statement that the deal would require approval, including from the UK Competition and Markets Authority (CMA).

“It cannot be ruled out at this stage that the combined group may be required to take remedial action to obtain the CMA’s prior approval of the combination, including the divestiture of businesses, assets or property belonging to the combined group,” they said.

Cost synergies

Ignacio Garat, chief executive of National Express, said the tie-up would create a “leading multi-modal passenger transport business” in the UK.


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“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, Stagecoach’s chief executive, said the companies had 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,” he said.

Future plans

The statement also outlined the key goals for the combined business:

  • Build further scale and relevance in increasingly “bus-friendly” UK market
  • Accelerate expansion of National Express businesses across the UK, including private hire coach
  • Expand across the UK’s large urban areas
  • Implement “industry-leading” environmental and sustainability services
  • Deliver significant operational efficiencies across the combined UK networks
  • Bring the “best of both” from the combined capabilities of the two operators

Deal terms

According to the terms of the deal, National Express shareholders will own approximately 75% of the combined group and Stagecoach shareholders the remaining 25%.

As of close of business on 20 September 2021, the deal represents a premium relative to the price of Stagecoach stock of approximately 18% on respective closing share prices.

Upon completion, Stagecoach chair Ray O’Toole will become chair of the combined group. Garat and Chris Davies of National Express, who are currently chief executive and chief financial officer, respectively, will assume the same roles in the combined group.

Read more: UK’s National Express reports Q3 growth amid merger talks

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