National Express bosses have described the sale of its West Midlands bus operations to the West Midlands Combined Authority (WMCA) as a "logical" move, as the parent company Mobico Group confirmed the transaction is expected to complete in November 2026.
Mobico Group announced it had reached an agreement in principle for the sale of net assets and operations of its West Midlands bus business (UK Bus) to WMCA. The transaction values the assets at approximately £102 million, broadly in line with book value, with expected upfront residual proceeds of around £24 million after deductions for transferred liabilities.
There will be a further deferred consideration of £5.5 million, with half payable at the end of 2027 and half payable on vacant possession of the Birmingham Central depot, expected at the end of 2029.
Strategic move to de-risk ahead of franchising
Mobico said the transaction aligns with its strategy to monetise its UK Bus assets and substantially de-risks the group from the forthcoming uncertainty of franchising in the area over the coming years. An internal reorganisation will be undertaken prior to completion of the transaction to transfer the assets and operations of UK Bus into a new legal entity.
The company noted that the bus operation has been heavily supported by Combined Authority funding and only delivered broadly break-even profitability. The acquisition provides WMCA with full control of the network, assets and operations of the business, significantly de-risking and facilitating the path to franchising in the area.
Leadership comments on the deal
Phil White, Executive Chair of Mobico, said: "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 in the area presented a significant headwind for the Group in managing the cost base and liabilities of the business going forward. As the West Midlands moves toward a franchised network, WMCA is the logical buyer to facilitate that transition. The transaction represents fair value for the assets and liabilities of UK Bus while providing certainty for our colleagues upon completion."
Paco Iglesias, Group CEO of Mobico Group, added: "We have been proud to serve the people and communities of the West Midlands for some 40 years, supporting 210 million passenger journeys a year in the region. This has only been possible thanks to the thousands of colleagues who have relentlessly delivered a safe, reliable and accessible bus service day in, day out. We have worked closely with the WMCA to help find the most effective way of introducing bus franchising. This is an important step in that process, providing continuity for passengers and colleagues, and we look forward to working with the WMCA to ensure a smooth handover in the coming months."
Next steps and impact
The bus franchise model being introduced is described as right for the region, with Mobico readying to participate in future tendering processes for bus franchises in the West Midlands and across the UK. The transaction is expected to close around November 2026, marking a significant shift in the region's public transport landscape as WMCA takes full control of the network.
