(Bloomberg) -- Long-distance bus brand Greyhound may be a U.S. icon, but it’s staying in European hands after British owner FirstGroup Plc agreed a sale to Germany’s FlixMobility GmbH.
After a years-long effort to dispose of Greyhound amid a wider exit from U.S. buses, FirstGroup will unload the business for $172 million, according to a statement Thursday.
FirstGroup shares rose as much as 2.4% in early trade in London.
FlixMobility has been building its own low-cost network across Europe for almost a decade and launched the FlixBus brand in the U.S. in 2018, linking Californian colleges with destinations like Las Vegas and Disneyland before expanding to New York and Texas. The Munich-based firm raised $650 million in new financing in June from investors who include BlackRock Inc.
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FlixBus said that Greyhound, which serves about 2,400 destinations across North America, carrying almost 16 million passengers each year, will help it tap into surging demand for travel as economies recover and people avoid the car to reduce carbon emissions. The company previously ranked behind both Greyhound and Megabus in the region.
“A compelling offering will draw significantly more travelers away from private cars to shared intercity bus mobility,” said André Schwämmlein, FlixMobility’s co-founder and chief executive officer. “Together, FlixBus and Greyhound will be better able to meet this increased demand.”
The purchase amount comprises $140 million up front, with a further $32 million paid over 18 months, FirstGroup said.
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