West Midlands Bus Network Sale
Mobico Group Sells West Midlands Bus Operation to WMCA for £24M Ahead of Franchising
Key Points
In May 2025, the West Midlands Combined Authority approved the move from a deregulated bus market to franchising, establishing a transitional period through to full rollout by the end of 2029.
Mobico's West Midlands UK Bus operation currently runs about 1,400 buses and facilitates roughly 120 million passenger journeys annually, corresponding to around 54 million miles of service.
As part of the deal structure, Mobico will retain around £6.5 million of cash for operating purposes.
Mobico’s board has unanimously approved the sale agreement.
The deal includes £5.5 million of deferred consideration, with half payable at the end of 2027 and the other half on vacant possession of the Birmingham Central depot expected at the end of 2029.
Mobico Group has agreed in principle to sell its West Midlands bus operation to the West Midlands Combined Authority (WMCA) for around £24 million, according to CBW Magazine. The deal hands control of roughly 1,400 buses and about 120 million passenger journeys a year to the local authority as the region prepares to scrap its deregulated bus market in favour of a franchised model by 2029.
The agreement reflects around £102 million in asset value, offset by roughly £78 million in liabilities that WMCA will take on, East Renne News reported. Mobico's board has unanimously approved the transaction, with completion targeted around November 2026.
WMCA Takes Over Four Decades of Bus Operations
National Express West Midlands, a Mobico brand, has run buses in the region for around 40 years. The operation covers roughly 54 million miles of service annually, CBW Magazine reported. Depots, the diesel fleet, and other assets will all transfer to WMCA as part of the deal.
In May 2025, WMCA formally approved the move from deregulated to franchised bus services. That decision set a transition period running to full rollout by the end of 2029. The sale is designed to smooth that shift by putting the authority in direct control of the network ahead of time.
How the £24 Million Deal Is Structured
WMCA pays £24 million up front and takes on around £78 million in liabilities, including pension obligations, electric vehicle contracts, and lease costs under accounting rules known as IFRS 16, according to The Comet. Mobico retains around £6.5 million in cash for operating purposes and keeps certain other liabilities.
The deal also includes £5.5 million in deferred consideration. Half of that is payable at the end of 2027. The other half comes when Mobico hands over vacant possession of the Birmingham Central depot, expected at the end of 2029, Hereford Times reported.
Mobico Calls Deal Key to 'Simpler and Stronger' Strategy
Mobico has framed the sale as a core part of its plan to shed UK Bus assets and reduce risk. The company says the transaction makes Mobico "simpler and stronger," Hereford Times reported. Before completion, the West Midlands operation will be reorganised into a new legal entity.
The deal protects shareholders by removing exposure to a business facing an uncertain future under franchising, the company said. Local authority funding has supported the network for years. By selling now, Mobico locks in value before the regulatory shift changes the operating landscape entirely.
Region's Shift to Franchising Sets the Stage for Change
Bus franchising means a public authority sets routes, fares, and standards, then pays operators to run services. It replaces the current system where private companies compete freely. Head Topics noted that uncertainty about bus funding under the new model drove the timing of the sale.
WMCA will now control the full network as it builds toward the 2029 franchise launch. The authority gains not just buses and depots but also the electric vehicle contracts Mobico had already signed. That gives the region a head start on modernising the fleet before full franchising begins.
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