Competition body halts sale of Stagecoach coach operations

The Competition and Markets Authority (CMA) has this morning issued an interim enforcement order (IEO) preventing National Express or Stagecoach from disposing of “material UK assets.”

The CMA says the purpose of the IEO is to maintain the businesses in their current shape while it starts its review of the proposed merger of the two operators.

On 14 December 2021, the Boards of National Express Group plc and Stagecoach Group plc announced that they had reached agreement on the terms of a recommended all-share combination of National Express and Stagecoach

As well as being conditional on approval by National Express and Stagecoach shareholders, completion of the merger is conditional on approval by the CMA.

To head off a CMA investigation, Stagecoach sold three inter-city coach businesses: Its stake in Scottish Citylink and the retail and customer service activities of Megabus UK and Falcon to ComfortDelGro Corporation Limited (CDG).

·      Stagecoach’s 35% interest in Scottish Citylink Coaches Limited, a joint venture between Stagecoach and CDG, which markets and retails inter-city coach services in Scotland and between Scotland and England (Scottish Citylink);

·      the UK Megabus business which markets and retails inter-city coach services in England and Wales (Megabus UK); and

·      Falcon South-West, which markets and retails tickets for a single coach route between Plymouth, Bristol and Bristol Airport (Falcon).

The total proceeds for the disposal are £8.75m and it was expected to complete on 28 February 2022.

While the IEO will delay completion of the proposed sale to ComfortDelGro Corporation, 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.”

In a statement they add: “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.”

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