The £1.9bn merger between National Express and Stagecoach is being investigated by the Competition and Markets Authority (CMA).
The regulator has served an initial enforcement order, which prevents the transport firms from fully combining or offloading businesses while it probes the deal.
Stagecoach said the move will delay the planned sale of the marketing, retail and customer service operations of its inter-city coach businesses to ComfortDelGro Corporation.
But the merger partners continue to believe the sell-off will be a “comprehensive solution to any competition concerns that might arise from their overlapping coach operations”, adding that they “will engage with the CMA to allow the Stagecoach coach disposal to complete as soon as possible”.
The two companies agreed an all-share merger last month in a deal that will create a combined group with a fleet of about 40,000 vehicles and a workforce of 70,000 people.
Under the terms of the tie-up, National Express shareholders would own around 75% of the combined group and Stagecoach shareholders around 25%.
The deal, which will be voted on by shareholders, valued Stagecoach at around £437m.
With the prospect of regulatory scrutiny looming large and in a bid to appease any competition concerns, Stagecoach announced deals to offload the marketing, retail and customer service operations of Megabus UK and the South West Falcon coach service, as well as its 35% stake in the Scottish Citylink Coaches joint venture.
Stagecoach said: “We do not expect the IEO [initial enforcement order] 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.”
The merger comes as both firms have been hit hard by the pandemic, with passenger numbers slumping due to lockdowns, remote working and a switch away from public transport.
Government support to help transport firms through the crisis is also due to end soon.
The transaction being investigated follows a previous attempt at a merger in 2009, when National Express rejected a £1.7bn deal mooted by Stagecoach.
National Express has bus and coach networks across the UK and Spain, while it also runs school bus services in America and a rail franchise in Germany.
Stagecoach is UK-focused and is Britain’s biggest bus and coach operator.
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