As well as coach services National Express has bus and rail operations

However, the company said the talks were at an early stage and there was no certainty of a deal being reached.

Alsa is the largest private coach and bus operator in Spain, operating a fleet of approximately 1,400 vehicles.

National Express operates bus and rail services in the UK and overseas, and says it carries one billion passengers in the world every year.

Wide reach

In early London trade, National Express shares were down 1.5% at 832.5 pence.

There can be no certainty as to whether any such transaction will be completed National Express statement National Express share price

National Express, which reported pre-tax profits of �63.1m last year, runs about 30% of UK passenger trains.

In the UK the company owns, or has stakes in, train firms C2C, Central Trains, Eurostar, Gatwick Express, Midland Mainline, One, Silverlink, Stansted Express, Wagn and Wessex Trains.

It also runs local bus services in Coventry, Dundee, Wolverhampton, Birmingham, and London, as well as operating a nationwide coach service.

In the US it has a subsidiary company called National Express Corporation, which operates more than 14,000 vehicles, employs 22,000 staff, and operates in 31 states.

Chinese services

Madrid-based Alsa had a turnover of 376m euros (�255m) in 2004, and as well as operating in Spain, Portugal and Switzerland, it runs services in Morocco, Chile and China.

When it moved into the Chinese market in 1984 it became the first overseas transport company to work there.

National Express runs Eurolines coach serves to many countries in western Europe, and a merger would create a continent-wide transport operation.

However, Birmingham-based National Express said that talks were still at an early stage.

"There can be no certainty as to whether any such transaction will be completed," it said in a statement.

"A further announcement will be made in due course if appropriate."