The combination would create a fleet of 40,000 vehicles and a workforce of 70,000 vehicles.
According to the two companies, the move would:
-further build scale and relevance in an increasingly 'bus-friendly' UK market, supported by the £3 billion national bus strategy for England as well as measures in Scotland and Wales;
-facilitate an acceleration of the expansion of National Express's growth businesses across the UK, such as commuter, shuttle, private hire coach and accessible transport, across Stagecoach's footprint, as well as deliver other growth and revenue synergies;
-expand across the UK's large urban areas, while continuing to enhance strong relationships with key public sector stakeholders and city partners who are aligned on the need for modal shift;
-implement industry-leading environmental and sustainability solutions at scale to deliver high quality, zero-emission public transport,
-deliver significant operational efficiencies across the combined UK networks, with, for example, National Express Coach utilising Stagecoach's well-located depot network to run and maintain its coach operations
-bring the 'best of both' from the combined capabilities of two high quality operators with well-aligned values and collaborative cultures
According to the two, the deal would provide cost savings of at least £45m per year, though there would be one-off costs of £40m over two years to realise those benefits, they add.
In terms of finance, the combined group is said to offer enhanced cash flow generation potential, and would accelerate a reduction of National Express’s debt.
Legally speaking, the deal is a court-sanctioned scheme of arrangement under Part 26 of the Companies Act 2006.
Tom Stables, CEO of National Express UK and Germany, will become CEO of UK and Germany for the combined group. Carla Stockton-Jones, UK managing director of Stagecoach, will become the managing director of UK bus for the combined group.
National Express must seek approval of shareholders. There will also need to be an anti-competition review by the UK CMA.
Commenting on the combination, Ignacio Garat, chief executive officer of National Express said: "The proposed combination of National Express and Stagecoach, and the unique strengths of both companies and their teams, will create a leading multi-modal passenger transport business in the UK, aiming to deliver superb services to customers and forging the way to a carbon free future with a new generation of zero-emission buses and coaches."