National Express and Stagecoach have confirmed they are in talks over a potential all-share merger.
A deal between to the two firms would create a transport giant.
Under the terms of the possible all-share tie-up, National Express would own around 75% of the combined group and Stagecoach shareholders around 25%.
It comes after both firms have been hit hard by the pandemic, with passenger numbers slumping during the crisis.
The groups have outlined plans to slash costs as part of the potential merger, with National Express saying it expects to find annual savings of at least £35 million, with around 25% by the end of the first year.
If the talks lead to a deal, the combined group would see Stagecoach chairman Ray O’Toole become chairman of the board.
National Express boss Ignacio Garat would be chief executive of the enlarged group.
National Express is an intercity and Inter-regional coach operator providing services throughout Great Britain.
Stagecoach operates local bus and tram services , and express coaches, around the UK. It has a fleet of more than 8,000 buses and coaches serving more than 100 towns and cities.
Analysts says that a merger could allow the two companies to reduce costs by sharing bus depots, routes and administrative functions.
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