Coach firms merge.

TWO of the biggest names in the coach tour business announced plans yesterday to join forces in a deal worth pounds 200 million.

Coach Holiday Group (CHG), which owns Wallace Arnold, and Shearings are to merge to form one of Europe's largest coach holiday companies, CHG shareholder 3i said.

The merger will create a company with a combined annual passenger count of nearly one million, a database of more than 2. 5 million people and more than 3, 400 staff.

The deal remains subject to approval by the Office of Fair Trading.

If it gets the go-ahead, 3i will have a 67. 8% stake in the new group and management will hold 32. 2%, of which a proportion is intended for an employee share option scheme.

Shearings' managing director John Slatcher described the proposed deal as a ``transforming step'' for both companies.

``The combination of the two businesses, with their strong brand awareness and discerning customer base, will significantly enhance our holiday offering, '' he said.

CHG is the parent company of holiday brands including Wallace Arnold, National Holidays and Caledonian Travel.