British transport company First Group has announced it has signed an agreement to acquire urban and intercity transportation system operator RATP Dev Transit London in a £90 million deal.

RATP London is one of the primary bus operators in the capital, operating 10 depots across Central and West London with a total fleet of 1,000 buses, a third of which are fully electric.

The acquisition, announced on 10 December and published on the London Stock Exchange, 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.   

Graham Sutherland, FirstGroup Chief Executive Officer, said: "This is a significant acquisition for the Group 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.

The acquisition is subject to French government approval and is conditional on TfL consent to the change of control. The Group anticipates completing the acquisition in the first half of 2025.