National Express Group PLC has agreed to acquire Continental Auto SL, a leading operator of public transport services in Spain, from Grupo ACS for £449.7m. The transaction, which is expected to be earnings enhancing for the group on a normalised basis in its first full year, is expected to complete before the end of 2007.

The transaction consolidates the Group's position as a leader in the Spanish public transport market, following the acquisition of Alsa in December 2005. Continental Auto, headquartered in Madrid, is a highly respected, well established coach and bus operator. Its extensive North-South long distance coach network complements Alsa's existing operations. In the year to 31 December 2006 Continental Auto generated total revenues of £134m.

On completion, National Express will have more than 2,100 vehicles in Spain and carry more than 142 million passengers per year. The combination of Continental Auto's and Alsa's networks will create a comprehensive national presence. 

Completion of the acquisition is subject to approval by the Spanish competition authorities.

Commenting on the transaction, Richard Bowker, Chief Executive of the National Express Group said "Continental Auto is a quality business and we are delighted that it will join the Group. This transaction fits perfectly with our stated strategy of utilising our strong balance sheet to acquire businesses in our core markets where our unparalleled management skills and experience can be applied.”

“ We anticipate significant growth opportunities in our Spanish business in 2007 and beyond. This transaction will reinforce our position as a leading provider in the Spanish public transport market. We look forward to working with all stakeholders to deliver the highest quality services to our customers."

National Express was advised by Merrill Lynch International.