National Express parent company Mobico Group has announced an agreement in principle to sell its West Midlands bus operations, known as UK Bus, to the West Midlands Combined Authority (WMCA). The company described the sale as a ‘logical’ step in the context of the region’s planned bus franchising.
The assets and operations involved in the transaction are valued at approximately £102 million, closely matching their book value. Following deductions for transferred liabilities, Mobico expects to receive upfront residual proceeds of around £24 million. Additionally, a deferred payment totalling £5.5 million has been agreed upon, with half payable at the end of 2027 and the remainder upon vacant possession of the Birmingham Central depot, anticipated by the end of 2029.
This sale aligns with Mobico’s strategic objective to monetise its UK Bus assets and reduce exposure to the uncertainties posed by upcoming franchising in the West Midlands. Prior to completion, Mobico will undertake an internal reorganisation to transfer UK Bus assets and operations into a new legal entity. The transaction is expected to complete around November 2026.
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Mobico highlighted that the West Midlands bus services have heavily relied on funding from the Combined Authority and have only managed to achieve a break-even position financially. The sale grants WMCA full control over the network, assets, and operations, which significantly mitigates risks and supports the transition towards franchising.
Phil White, Executive Chair of Mobico, stated, “This agreement is another significant milestone in making Mobico simpler and stronger while substantially de-risking the Group. UK Bus has been break-even for a number of years, and the uncertainty of future franchising presented a considerable challenge in managing costs and liabilities. As the West Midlands progresses towards a franchised network, WMCA is the logical buyer to facilitate that transition. The transaction represents fair value and provides certainty for our colleagues upon completion.”
Paco Iglesias, Group CEO of Mobico Group, added, “We have been proud to serve the communities of the West Midlands for around 40 years, supporting 210 million passenger journeys annually. This achievement is thanks to the thousands of colleagues who consistently deliver safe, reliable, and accessible bus services. Our close collaboration with WMCA aims to ensure an effective introduction of bus franchising. This sale is a crucial step that offers continuity for passengers and staff, and we look forward to working with WMCA on a smooth handover. The franchising model is suitable for the region, and we are preparing to participate in future tendering for bus franchises both in the West Midlands and across the UK.”