The acquisition gives Perth-based Stagecoach an entry into the fragmented but lucrative US coach operating market.

Stagecoach Holdings plc will pay $42 a share for Coach USA - the largest motorcoach charter, tour and sightseeing operator in the US.

BBC Scotland's Colin MacKinnon reports

Stagecoach Chief Executive, Mike Kinski, said Coach USA was almost a replica of the British group and that he expected the two to work well together.

"We see this as a $40bn (�25bn) market potential", he said.

"We are looking to significantly grow the business."

Coach USA has a fleet of almost 10,000 vehicles, including 4,500 coaches, 2,000 minibuses and 3,300 taxis.

It was set up in 1995 and has grown to operate in 30 states across the US and Canada and Mexico, buying up more than 70 other businesses along the way.

Coach USA's Chief Operating Officer, Frank Gallagher, said his firm's senior managers would be investing $10m in Stagecoach shares as part of the deal.

He said it was to show their good faith in Stagecoach, which will assume Coach USA's net debt of $638m (�399m) when the deal is complete.