UK's FirstGroup to acquire Greyhound of US

10 February 2007

Mumbai: Britain's biggest bus company, FirstGroup plc, has agreed to buy Laidlaw International Inc., the US company that runs Greyhound buses, for $2.8 billion, including debt.

Greyhound serves more than 3,100 destinations with 16,000 departures across North America each day while FirstGroup runs more than one in five of all local bus services in Britain and carries 2.8 million passengers a day.

"FirstGroup's acquisition of Laidlaw will considerably enhance the group's existing activities in North America, which themselves have grown strongly since we first invested in the US in 1999," said FirstGroup chief executive Moir Lockhead.

Under the deal, which values Laidlaw share at $35.25, FirstGroup will pay about $2.8 billion for Laidlaw's shares and will take on about $800 million of debt. It will partly pay for the deal by placing shares to raise 200 million pounds ($393 million).

FirstGroup said it expected the acquisition to generate about $70 million of annualised pre-tax cost savings and to boost earnings, both in the first full year of ownership.

Lockhead ruled out any immediate job cuts, saying that the combined company may probably need more as it expands. The deal would also make FirstGroup the largest operator of yellow school buses in the United States.