FlixBus Signals It’s Not Interested in Buying Rival Greyhound

(Bloomberg) -- German bus startup FlixBus signaled it’s not interested in buying U.S. rival Greyhound, saying it will focus on expanding in the U.S. without big deals.

Co-founder and Chief Executive Officer Andre Schwammlein said Greyhound doesn’t offer the same benefits to FlixBus as Turkey’s Kamil Koc, which the company announced it was buying in August.

Kamil Koc “has a strong brand and network, very good team and it also fits very well into FlixBus’s philosophy in terms of developing business,” Schwammlein said Wednesday in an interview on the sidelines of the Brand Week conference in Istanbul. “If I look at the U.S., I don’t see the same fit with Greyhound.”

The company, officially called FlixMobility GmbH, moved into the U.S. last year and has been taking on Greyhound, owned by U.K. bus and train operator First Group Plc, and Megabus.

“If I look at our U.S. business, I am very happy what we are doing there,” Schwammlein said. “At the moment, my clear focus in the U.S. is organic growth, not major merger and acquisition.”

Greyhound Sale

FirstGroup, which has been under pressure from an activist investor, announced earlier this year that it was considering a breakup of its businesses, including a possible sale of Greyhound. While no final decision on a sale has been made, it stoked speculation that FlixBus might bid for Greyhound.

FirstGroup spokesman Stuart Butchers said on Thursday that Greyhound remains for sale, and the company expects to provide an update on the situation with its fiscal first-half results next week.

Schwammlein also brushed aside the idea of a possible IPO, saying the company has secured enough private funding for its expansion plans.

Reuters reported in July that FlixBus had raised about 500 million euros ($554 million) in funding. Schwammlein declined to confirm the amount, but said it was “significant” and the company raised “exactly what they wanted.”

“We are not tempted by an IPO because being public doesn’t serve any other purpose than financing the company,” the CEO said. “If I can do it in private better than public, I do it in private.”

Schwammlein defined FlixBus as “Europe-centered” and said he considers Turkey as a test to prove that FlixBus can be successful in a non-western country. “This will prove that we can expand the company further in emerging markets,” he said.

--With assistance from Christopher Jasper.

To contact the reporter on this story: Ugur Yilmaz in Istanbul at uyilmaz@bloomberg.net

To contact the editors responsible for this story: Onur Ant at oant@bloomberg.net, Anne Pollak, Aaron Kirchfeld

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