Market Loop - 🙏Merging lanes

TRANSPORT
Stagecoach and National Express agree to merge

What’s going on?
National Express has agreed to takeover rival Stagecoach for £437m in a deal that combines two of Britain’s biggest bus companies. 

Why is this important?

It was back in September that reports emerged that Stagecoach, the country's biggest bus and coach operator was in talks with National Express - best-known for its UK coach services with operations the US and continental Europe.

It’s not the first time that this combination has been touted. In 2009 National Express rejected a £1.7bn offer from Stagecoach.

But yesterday both companies announced that they had struck a deal that will create a group worth about £1.9bn, with a fleet of 40,000 vehicles and a workforce of about 70,000.

Public transport passenger numbers have been decimated by lockdown and the pandemic-related growth in home working.

By joining forces Stagecoach and National Express will be able to cut costs and improve their chances of survival. The companies also want to expand into areas like private hire coach and shuttle operations and make its fleet more environmentally friendly.

Takeaway
To go through the deal will need to get shareholder and competition authorities approval. The latter will likely be the toughest hurdle with regulators scrutinising whether consumers will be subject to higher fares if the merger happens. 

RETAIL
Ocado wins tech patent battle against US rival

Shares in Ocado jumped 6% after the online grocer announced it had won the first round in a long running and potentially costly patent-infringement case with rival AutoStore Holdings.

The legal battle centres on the robot-operated warehouse technology that Ocado uses and sells to other retailers. The outcome of the case could affect the company's expansion into the US online grocery market.

Autostore complained that the British company infringed its patents, but the US International Trade Commission, concluded that this wasn’t the case. Autostore looks set to appeal the decision.

The news came as Ocado announced that trading in the run up to Christmas was strong with order numbers up 9% in the 13 weeks to 28 November compared to last year. 

It was also said it was confident that 2022 would be even better and expects sales growth, close to 15%. 

But, as is the norm in all retailer trading updates, Ocado warned that they faced lorry driver shortages and flagged that customers were returning to smaller basket sizes as they go back to physical supermarkets post lockdown.