British bus and train operator FirstGroup PLC agreed to buy the parent company of bus firm Greyhound Lines, Inc. in an all cash deal worth $3.6 billion.

Under the terms of the agreement, FirstGroup will buy Laidlaw International, Inc. (NYSE: LI) shares for $35.25 each, 11 percent above Thursday’s closing price. The deal must be approved by shareholders of both companies and is subject to regulatory approval.

“FirstGroup's acquisition of Laidlaw will considerably enhance FirstGroup's existing activities in North America, which themselves have grown strongly since we first invested in the U.S. in 1999,” said Moir Lockhead, Chief Executive of FirstGroup in a statement.

In Laidlaw, FirstGroup acquires not only Greyhound but also its operating fleet of Yellow school buses. The British firm also has a strong presence in the North American school bus market.

Laidlaw shares closed up 9.02 percent, or $2.86, to a record high of $34.58 in Friday trading on the New York Stock Exchange. Firstgroup shares rose 4.3 percent to $11.45 on the London Stock Exchange.