The board of directors of the English multinational passenger land transport company National Express (NX), owner of the Asturian Alsa, and that of its Scottish competitor Stagecoach have reached a definitive agreement for their merger by absorbing Stagecoach by NX.
The operation, whose project was announced in September and which has undergone two extensions (the second of which expired this Wednesday) is subject to the ratification of the agreement by the general shareholders’ meetings. The NX company must in turn approve an issue of new shares for the purchase of Stagecoach through an exchange of securities: the Scottish shareholders will receive 0.36 NX shares for each Stagecoach share, with which the current owners of the group Scotsman will control 25% of the merged company and those of NX, 75%. The distribution of the board of directors will be similar.
The main shareholder group of NX, the Asturian family Cosmen Menéndez-Castañedo, will continue to be the reference investor and will retain the vice presidency, which is currently held by Jorge Cosmen.
NX already has an irrevocable commitment from the Board of Directors of Stagecoah to accept the offer of National Express and go to the exchange with the 14.6% that the directors control in the Scottish company and to recommend to the rest of its shareholders that they do the same . In addition, the businesswoman Dame Ann Heron Gloag (née Dame Ann Souter), co-founder of the Scottish group with her brother Brian and owner of 10.5%, has sent a letter through HGT Finance A Limited, expressing your intention of adhere to the change of titles contributing 10.5% you own at Stagecoach.
According to the exchange of shares and the listing of both companies on the stock market, the non-monetary purchase of Stagecoach is valued at 468 million pounds sterling (548.23 million euros). The The merged company would be worth 1,900 million pounds today (2,230.61 million euros).
Integration involves an operation of great impact on the UK market, where National Express, based in Birmingham, is a leader in the long-haul segment (coaches) and its Scottish competitor, based in Perth, is a leader in the urban and metropolitan market (buses). The two groups will move to around 30% in the UK, the only market in which Stagecoach currently operates. NX also does it in Spain, Portugal, Morocco, Malta, Puerto Rico, Switzerland, France, Germany, Canada, USA and Barhein.
The sum of both groups will go on to handle 40,000 vehicles, 70,000 employees and more than 1 billion services of passengers per year, will generate savings and synergies before taxes of 45 million pounds (52.85 million euros) – a figure higher than that forecast in September – and will give NX a great superiority over the other large operators in the country: First Group, Arriva and Go Ahead.
The absorption of Stagecoach, owner of 39 trains, will mean the return of NX to the British railway market, where it was a large operator and from which it has been absent for a decade after the serious losses caused by the West Coast Main Line and the subsequent disagreement with the regulator due to the resignation to continue with the exploitation of that route. Today NX has railways in Germany and several tourist trains in Spain, in addition to managing the Bulnes funicular (Asturias).
The two companies confirmed yesterday that, as advanced in September, Sir John Armitt will step down from the non-executive chairmanship of NX, to be carried out by Ray O’Toole, the current president of Stagecoach. O’Toole is an old acquaintance of NX and the Cosmen family. He was director of operations between 1999 and 2011 of NX and in 2005 he participated in the conversations by which Alsa, leader in Spain, became a subsidiary of the English company in an operation of 381 million euros (217 million in cash and 164 million in shares) in addition to the assumption of 289 million of financial debt of the Asturian group.
The agreement between the two boards supposes the ratification not only of Jorge Cosmen as vice president, but also that of the current CEO of NX, the Spanish Ignacio Garat, and that of the British Chris Davies, who will continue as NX’s financial director.
Tom Stables, CEO of NX UK and Germany, will become CEO of UK and Germany, and Carla Stockton-Jones, current CEO of Stagecoach UK, will become CEO of UK Buses United.
The group said it plans restore dividend as soon as the merger by absorption is consummated, which could happen, prior regulatory and Competition authorizations and the holding of general meetings, within one year.