Stagecoach Deal

Dear colleagues,

This morning, we announced to the Stock Exchange that we have reached an agreement to combine the businesses of National Express and Stagecoach.

We believe this deal, which is subject to approval by the Competition and Markets Authority and both sets of shareholders, is a compelling opportunity to create a leading passenger transport group.

This is an exciting opportunity to bring together the best of both companies to deliver the range of services our customers want - and to seize new opportunities. Stagecoach is already a leading UK bus operator. Combining this with our scheduled coach network, the largest in the UK, and our bus network in Birmingham will further strengthen our UK transport offering.

Both companies also have clear ambitions to be environmental and sustainability leaders, and together we will target a fully zero emission UK fleet by 2035.

Although the deal is focused on the UK, it is also a game changer for the Group as a whole.

I know a lot of you will want to know about the future shape of the business.

We are not expecting the combination to result in any frontline operational job losses or depot closures. Birmingham will be the head office of the UK operation and will also remain the PLC head office.

There will be a period of review as we bring together the two businesses, but this combination is a catalyst for growth - not reducing what we currently do. We expect the deal to complete around end of 2022.

To provide a bit more of the background, Tom Stables has joined me on a short video which you can view here.

Next Steps

We need to get Competition and Markets Authority and shareholder approval for the combination and these processes.

I know that you are likely to have questions and we will do our best to answer them. However, there are a lot of legal rules about what we can and cannot say in these situations. My commitment to you is that we will keep you updated when we can.

A copy of the Announcement has been published on our PLC website at https://www.nationalexpressgroup.com/investors/possible-combination/

You can submit any questions you have to: questionsfortom@nationalexpress.com. We will collate these and provide answers on this webpage.

If you are asked about the announcement by people outside of the company, please don’t comment or speculate. Remember that there are legal rules about what we can say. If you are approached for comment by any journalists, please refer the inquiry to Alison Cole in our Group communications team: alison.cole@nationalexpress.com

I look forward to updating you further as the deal process continues.

This notice is being given in accordance with Rule 2.11(b)(ii) of the Takeover Code.

Kind regards,
Ignacio

Ignacio Garat
Group Chief Executive

Frequently asked questions

What has been announced today?

Today we’ve announced our intention to bring together our two companies. It falls under rule 2.7 of the Takeover Code. This means National Express will proceed with the combination with Stagecoach, subject to certain legal and regulatory conditions including approval by the Competition and Markets Authority and both sets of shareholders.

When will the deal complete?

We expect the deal to complete around the end of 2022.

Why will it take so long for the deal to complete?

This is because the deal is subject to certain legal and regulatory conditions including approval by the Competition and Markets Authority and both sets of shareholders.

What is the next step in the deal process/what is the timeline to completion?

The next stage is for the deal to be reviewed by the Competition and Markets Authority and then for approval of both sets of shareholders to be obtained and this could take around 12 months.

Will there be job losses?

We are not expecting any frontline operational job losses or depot closures. Birmingham will be the head office of the UK operation and will also remain the head office for the Group

There will be a period of review as we bring together the two businesses, but this combination is a catalyst for growth - not reducing what we currently do.

The combination of the businesses is an opportunity to create a leading multi-modal transport provider in the UK.

There are around 50 corporate, head office, senior management and IT roles between the two businesses where there is duplication.

These would be considered as part of a post-completion review, which will be undertaken in the first 3 months following completion. However, existing statutory and contractual rights will be safeguarded.

Can I take voluntary redundancy if there are to be job losses?

We are not considering a voluntary redundancy programme.

Does TUPE apply to the deal?

TUPE doesn’t apply in this case, as it's an all share transaction.

Have National Express and Stagecoach discussed this deal with the Unions?

Yes, we are keeping our trade union partners informed and will continue to update them as the deal progresses.

What will happen to my depot?

It is business as usual. We are not expecting any frontline operational job losses or depot closures as a result of the deal.

There will be a period of review as we bring together the two businesses, but this combination is a catalyst for growth - not reducing what we currently do.

The combination of the businesses is an opportunity to create a leading multi-modal transport provider in the UK.

Will Birmingham still be the head office for National Express?

Birmingham will continue to be the head office of the UK operation and will also remain the head office for the Group.

The announcement mentions 50 duplicate roles – what will happen if your job is one of those duplicates?

There are around 50 corporate, head office, senior management and IT roles between the two businesses where there is duplication.

These would be considered as part of a post-completion review, which will be undertaken in the first 3 months following completion.

However, existing statutory and contractual rights will be safeguarded.

How and when will decisions be taken on the duplicate roles?

A three month review period would follow the completion of any deal.

Will I be able to relocate to another depot or office location?

We continue to be two separate businesses until the deal completes and its very much business as usual.

We will continue to advertise any vacancies as we do now within each business and you will be able to apply. Once the transaction is completed you will be able to apply for any internal vacancy across the combined business.

Will I be able to apply for jobs in Stagecoach?

We continue to be two separate businesses until the deal completes and it's very much business as usual.

We will continue to advertise any vacancies as we do now within each business and you will be able to apply. Once the transaction is completed you will be able to apply for any internal vacancy across the combined business.

Will my pay be affected?

It’s business as usual. Your current pay will not change as a result of this deal.

Will my terms and conditions change?

Your employee terms and conditions will not change as a result of this deal.

Will my pension change?

Your pension benefits will not be changed as a result of this deal.

Who will be the CEO of the new combined business?

Ignacio Garat will be the Group CEO of the new combined business.

Who will be the CEO of the UK combined business?

Tom Stables, CEO UK and Germany will be become CEO of the UK & Germany for the combined Group. Carla Stockton-Jones, UK MD of Stagecoach, will become the UK MD of UK Bus for the combined group.

What tech/systems will be used in the combined business?

It’s business as usual. On completion of the deal we will undertake a review of a number of our processes, including IT and digital systems.

What do I say when people ask me if the deal will happen?

If you are asked about the announcement by people outside of the company, please do not comment or speculate. There are legal rules about what we can say. If you are approached for comment by any journalists, please refer the enquiry to Alison Cole - alison.cole@nationalexpress.com.

If I have other questions who do I ask?

You can ask your line manager or direct any further queries to questlonsfortom@nationalexpress.com.

How will you keep us informed of progress?

We will share updates as soon as we are able.

We will also update this webpage with any further information: www.nationalexpress.com/en/stagecoachdeal

Update on combination of National Express and Stagecoach