British bus operator Stagecoach on Wednesday backed a takeover from German infrastructure investment firm DWS, scrapping its previous support for a merger with rival UK firm National Express.

Stagecoach has accepted a cash bid worth £595 million (€716m) or 105 pence per share, DWS said in a statement.

“Stagecoach is a fantastic business with an exciting future as a central player in a revitalised UK bus and coach market,” said DWS head of infrastructure Hamish Mackenzie.“DWS Infrastructure will back Stagecoach to rapidly capitalise on the growth opportunities presented by increased public and private investment in UK bus and coach.”

The German company added it was a long-term investor in essential services with a strong track record in UK and European transport.

“The proposed offer presents a major opportunity to maximise the significant growth potential ahead,” added Stagecoach chief executive Martin Griffiths.

National Express in reaction urged shareholders to take no action – but Stagecoach added its management would “no longer recommend” their tie-up. The proposed £1.9-billion merger with National Express had already hit the skids in January when UK regulators highlighted competition concerns.

The proposed £1.9-billion merger with National Express had already hit the skids in January when UK regulators highlighted competition concerns

National Express has bus and coach networks across the UK and runs services abroad, while Stagecoach is one of Britain’s largest bus and coach operators. The two groups had sought to slash costs in the wake of the coronavirus pandemic. But the Competition and Markets Authority had ordered a pause to the tie-up in January while it readied a competition probe.