British bus operator Stagecoach has agreed to be taken over by a German infrastructure fund in a £595million deal.

In a sudden U-turn, the company which operates across Gloucestershire and has an office in Gloucester, dropped support for a £1.9billion merger with National Express, reports the Guardian.

Instead it recommended a sale to the fund managed by DWS Infrastructure for 105p a share in cash.

Stagecoach said the bid offered greater certainty for investors and its 24,000 employees, with the overall headcount of bus drivers expected to remain the same.

Its headquarters in Perth, central Scotland, will be retained along with its staff and the chief executive, finance director and UK managing director will on be staying on.

Martin Griffiths, chief executive of Stagecoach, said: “The proposed offer presents a major opportunity to maximise the significant growth potential ahead as governments seek to deliver economic recovery, level up communities, provide better health outcomes for citizens, and transition to a net zero future.

“We believe it will open a new and exciting chapter for Stagecoach, backed by a team who share our vision for a more sustainable future.”

Stagecoach was launched in 1980 by a Scottish businessman, Sir Brian Souter, and his sister, Dame Ann Gloag. The DWS takeover will mark the end of the Souter family’s long interest in the sector.