National Express Corp. and Petermann Partners Inc. will shed several school bus contracts to resolve antitrust concerns and proceed with their proposed merger, the U.S. Department of Justice said on Monday.

National Express announced in September that it had signed an agreement to acquire Petermann. Both companies are among the 10 largest school bus contractors in the U.S. and Canada.

The Department of Justice said that National Express and Petermann have agreed to divest eight school transportation contracts and associated assets in the states of Washington and Texas.

The contracts are in the school districts of Battle Ground and Hockinson in Washington and the school districts of Bastrop, Boyd, Eagle Mountain-Saginaw, Leander, Manor and Terrell, as well as Dallas-based KIPP Truth Academy, in Texas.

“The sale of the assets will help ensure continued competition for school bus contracts, which will benefit taxpayers in Texas and Washington,” said Acting Assistant Attorney General Joseph Wayland, who is in charge of the Department of Justice’s Antitrust Division.

A similar shedding of school bus contracts occurred when FirstGroup acquired Laidlaw in 2007.

The contracts in the National Express/Petermann deal will be sold to Student Transportation Inc. (STI). The school boards and entities whose contracts are being divested are in the process of approving the transfers, the Department of Justice said.

STI said that the contracts will add annualized revenues of more than $19 million. The transaction consists of vehicle purchases and assignment of contracts estimated to be worth more than $16 million.

STI said that it will utilize availability under its senior credit facility to fund the $6.4 million purchase price.

“This is a great deal for us as we enter two states that offer future growth opportunities,” STI Chairman and CEO Denis Gallagher said. “We are very excited to be welcoming on the new members of the Petermann operations team in these two states to our family of companies.”

Petermann Partners, headquartered in Cincinnati, has revenues of approximately $150 million. Warrenville, Ill.-based National Express Corp., a subsidiary of National Express Group PLC in the U.K., has revenues of more than $700 million.