Stagecoach takeover investigated by CMA

The UK’s Competition and Markets Authority (CMA) announced it is investigating the anticipated merger between National Express Group plc and Stagecoach Group plc.

National Express Group Plc said on December 14 it agreed to buy Perth-based transport rival Stagecoach in an all-share transaction worth about £470 million.

Following completion of the deal, Stagecoach shareholders would own 25% and National Express shareholders would own 75% of the combined group.

However, the CMA has issued an interim enforcement order (IEO) in relation to the proposed combination.

Stagecoach said the order prevents National Express or Stagecoach “from disposing of material UK assets at the current time.”

The CMA has indicated that the purpose of the IEO is to maintain the businesses in their current shape whilst it commences its review of the combination.

“The IEO will therefore delay completion of the proposed sale of the marketing, retail and customer service activities of Stagecoach’s inter-city coach businesses … beyond the previously expected completion date of 28 February 2022,” said Stagecoach.

“However, the boards of National Express and Stagecoach continue to believe the Stagecoach coach disposal represents a comprehensive solution to any competition concerns that might arise from their overlapping coach operations and will engage with the CMA to allow the Stagecoach coach disposal to complete as soon as possible.

“We do not expect the IEO to materially affect the day to day operations of either National Express or Stagecoach, and the parties will continue to work with the CMA in relation to its review of the combination.

“At this stage, the boards of National Express and Stagecoach continue to expect the combination to complete around the end of 2022.

“A further statement will be made as appropriate.”

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