Bus Oligopoly
British passenger transport company FirstGroup announced it would by the biggest bus company in North America, Laidlaw. The deal is for $3.6 billion.
Laidlaw is a relatively quiet operation, but it is dominant in two fields. Laidlaw owns the Greyhound system of inter-city buses. It also is the leading player in the US outsourced school bus market, with a 27% share of the market. FirstGroup is #2 in that segment has around 13% of the market.
Laidlaw, started in the 1920s as a Canadian trucking company, field for Chapter 11 in 2001. It has since sold off its interest in ambulance services.
FirstGroup in 1999 bought US school bus operator Ryder. In the UK, it is the #1 passenger transport company, running a number of rail and bus services. It is the leading manager of local and regional bus services. It also runs a number of passenger and freight operations on rail line. It also has major operations in vehicle maintenance services. It also runs shuttle and minibus services at US airports as well as paratransit. It was founded in Scotland in 1995 as FirstBus and has expanded rapidly over the past decade.
It's not certain that FirstGroup will hold on to Greyhound. In terms of the school bus business, less than 20% are currently outsourced. The betting is that the market will expand, as local school boards try to offload capital equipment.
The move is another step in the international consolidation of transport and freight services.
