The FTSE 250-listed group, which has been put under pressure to sell by activist investor Coast Capital, said it had begun the formal process to sell First Student and First Transit.
“We firmly believe that a sale of these assets is the best way to unlock material value for all FirstGroup shareholders,” said chairman David Martin.
The North American operations generated combined revenues of US$3.8bn and underlying profits (EBITDA) of US$558mln in the year to last March, of which US$2.4bn and US$465mln is attributable to the 43,000 yellow school buses of First Student.
Talks about the potential sale of its Greyhound US bus business were said to be ongoing, with its trading environment said to be challenging due to lower fuel prices making coach travel less attractive.
These sales will leave the company focused on its slower-growing UK-based First Bus and First Rail operations.
A trading update for the five months to end-February showed the group’s largest business, First Student, grew revenue 4%, with First Transit up 5.7%.
In the UK, First Bus like-for-like passenger revenue was up 2%, while First Rail was up 3.8% with the performance of its rail franchises “continuing to vary considerably”.
Martin declared the company’s UK-focused future “will play a key role in supporting the government’s plans to stimulate economic growth throughout the country while reducing the environmental impact of transport”.