National Express says it has reached a takeover agreement with Stagecoach, which operates bus routes across the county.

Talks between the two transport giants first came to light earlier this year. The all-share takeover to merge the two businesses will create a combined firm worth around £1.9 billion with a fleet of about 40,000 vehicles and a workforce of around 70,000 people.

Stagecoach was founded in 1980 by Ann Gloag and her brother Brian Souter. Both continued to hold shares in the firm.

It was Ann Gloag - name Dame Ann Gloag - who bought Manston Airport in Thanet in 2013 for £1 and vowed to turn it into a thriving business.

A little over a year later she shut it down and sold a majority stake in the site to developers.

National Express owns the Kings Ferry coach company in Medway.

The merger comes as both firms have been hit hard by the pandemic, with passenger numbers slumping due to lockdowns, remote working and a switch away from public transport.

Government support to help transport firms through the crisis is also due to end soon.

The merged transport giant will boast a fleet of around 40,000 vehicles and a workforce of approximately 70,000 people.

Under the terms of the tie-up, National Express shareholders would own around 75% of the combined group and Stagecoach shareholders around 25%.

The deal, which will be voted on by shareholders, values Stagecoach at around £437m.

National Express chief executive Ignacio Garat, who will keep the same role in the new firm, said: "The proposed combination of National Express and Stagecoach, and the unique strengths of both companies and their teams, will create a leading multi-modal passenger transport business in the UK.

This is an exciting opportunity to bring together two of the UK’s iconic transport brands

"The combined group will also benefit from the significant growth and cost synergies and a stronger balance sheet to significantly accelerate growth investment across our diversified international portfolio, aiming to deliver attractive sustainable returns to shareholders."

Martin Griffiths, chief executive of Stagecoach, added: “This is an exciting opportunity to bring together two of the UK’s iconic transport brands to create a strong, diverse business that is well-placed to grow the market for greener and smarter public transport for the benefit of all stakeholders.”