First Group enters London bus market at scale through acquisition

First Group has announced it has signed an agreement to acquire RATP Dev Transit London which with 14% of London’s bus market is one of the largest bus operators in the capital.

The £90 million deal will be financed with £45 million from First Group's existing cash reserves and the assumption of RATP London's asset-backed vehicle finance leases. RATP London operates 10 depots across Central and West London with a total fleet of 1,000 buses, a third of which are fully electric.

 Graham Sutherland, FirstGroup Chief Executive Officer said, "This is a significant acquisition that will diversify our portfolio and materially grow our earnings in the medium term.

“It allows us to enter the London bus market at scale and will also bolster our credentials as we participate in future franchising opportunities across the UK.

"We look forward to continuing to build on our relationship with TfL and welcoming RATP London's employees into the Group, to continue the transformation of the business and to capitalise on the growth potential in the London market."

According to First Group, the acquisition will be broadly earnings-neutral in 2025 and 2026, and the company expects revenue to grow to £300-350 million over the next five years.

RATP London is part of French company RATP Dev which operates and maintains urban and intercity transportation systems on five continents. The acquisition is subject to French government approval and is conditional on TfL consent to the change of control. First Group anticipates completing the acquisition in the first half of 2025.