IT slipped by last week with little fanfare as the country became increasingly blind-sided by the impact of the Omicron variant.

While much business focus was rightly placed on the impact on the hospitality and retail sectors from the latest iteration of coronavirus, and as people worried about restrictions tightening to combat surging infection rates as Christmas approaches, another major Scottish company was swallowed up.

The board of Stagecoach finally struck a deal with their counterparts at National Express that results in the Perth-based transport giant – established in 1980 by Sir Brian Souter and sister Dame Ann Gloag – losing its independence.

Terms were finally agreed on a £1.9 billion all-share merger, first unveiled in September, that will lead to shareholders in Stagecoach owning around 25 per cent of the enlarged company and, ultimately, the exit of the Scottish company’s chief executive Martin Griffiths and finance chief Ross Paterson.

It marks the end of an era for a company that became a major player in the UK’s privatised rail sector in the 1990s, following its stock market flotation in 1993, before it was badly bruised by its involvement in the franchise system in more recent years. By the time talks began with National Express, Stagecoach was almost exclusively a bus operator once again, having effectively declared its withdrawal from rail franchising in 2019 after being stripped of the East Coast Main Line it ran with Virgin Trains.

Given the enormous impact that the pandemic is continuing to have on the public transport sector – Stagecoach said this month that UK regional bus passenger numbers have recovered to only around 70 per cent of pre-Covid levels – a degree of consolidation within the sector was perhaps inevitable. It has been an extremely challenging period for the major bus and rail companies, even though governments on both sides of the Border have injected huge amounts of public money into keeping services going amid the pandemic.

But it is nonetheless disappointing to see another major Scottish-headquartered company lose its independence, with Stagecoach following a path previously trodden by such illustrious names as Stakis, Scottish & Newcastle, Kwik-Fit and ScottishPower in recent decades, and Aggreko earlier this year. Aggreko, which employs about 300 people in Dumbarton, was sold to private players TDR Capital and 1 Squared Capital for £3.2 billion in March.

Each loss of a major company headquarters is a dent to Scotland’s corporate prestige and a dispiriting reminder of Scotland’s diminished status as a location of economic influence and decision-making. That diminution can also be seen at NatWest Group, the owner of the once-mighty Royal Bank of Scotland, which although it continues to have its brass plaque in Edinburgh is run by chief executive Alison Rose and fellow directors to a very large extent from London.

Stagecoach bosses had, of course, a fiduciary duty to act in the best interests of the company’s shareholders with regard to the National Express offer. Shares in Stagecoach have gradually tumbled over the last five years.

Speaking last week, Mr Griffiths said the merger would bring opportunities for shareholders, staff, customers and passengers. And he noted the enhanced scale of the merged company would position it better to take advantage of opportunities that will arise for public transport once the pandemic subsides. But the deal raises the question once more of why Scotland seems to be unable to hold on to its biggest companies.

Do Scottish companies lose their independence more easily when they fall on tougher times? Is there something fundamentally deficient with the economic backdrop in Scotland that puts a glass ceiling on the ability of a company to grow beyond a certain size and stay independent? Should we not be striving to ensure Scotland is not only fertile land for starting up new companies, but an environment where companies can be encouraged to grow and remain rooted in the country of their birth?

It is hard to over-state the benefits such a strategy would bring, be it for Scotland’s corporate reputation internationally (crucial for attracting inward investment) and job creation. The existence of a major company headquarters in a city or town can also support many smaller businesses in its vicinity, as well as its supply chain.

The bosses of Stagecoach and National Express estimated last week that around 50 jobs are likely to go as a result of the merger because of the duplication of roles in corporate, head office and senior management positions. A small number of roles in information technology are also expected to be made redundant.

Given the merged business will have a combined workforce of around 70,000 people, the number of redundancies appears small, but it is nonetheless always a matter of regret when people lose their jobs when companies do deals in the name of saving costs.

And, while for now Stagecoach and National Express say all depots will remain open, how long will that remain the case? It is easy for companies to make pledges at the time a deal is done, only for circumstances to later change further down the line once the glare of publicity has receded.

With the Scottish Government and an independent council of advisers, which includes a range of successful business figures, having been engaged in compiling a 10-year strategy for Scotland’s economic transformation in recent months, it is to be hoped the question of how to build and retain big companies in Scotland has been given sufficient thought. It won’t be long before other big companies in Scotland go the same way as Stagecoach and Aggreko.

But the news has not all been negative in recent days. It was encouraging to see the Donaldson Group, the historic Fife timber merchant, continue its expansion with the acquisition of the timber-frame manufacturing arm of Aberdeen’s Stewart Milne Group. The deal, which Donaldson described as a “natural fit”, preserves jobs and ensures the ownership of the business remains in Scotland.

That should hopefully ensure key decisions will continue to be made in Scotland by owners who instinctively understand the business and the market it operates in, not by executives in a faraway location who might one day feel no compunction about pulling the plug on jobs and sites.