Fleet News

Sale of RAC referred to Monopolies commission

THE £450 million acquisition of RAC Motoring Services by American-owned Cendant Corporation has been referred to the Monopolies and Mergers Commission. In announcing the referral, Competition and Consumer Affairs Minister Dr Kim Howells, said he was concerned that the proposed acquisition by Cendant, which already owns Green Flag, 'raises competition concerns in respect of the market for breakdown insurance'.

Following advice from John Bridgeman, the Director General of Fair Trading, Howells said: 'The decision to make a reference does not in any way prejudge the question of whether or not the merger would be against the public interest. It is for the MMC to report on this after its investigation.'

The MMC will report back to the Minister by December 23. The AA is the UK leader in the vehicle breakdown recovery market with a near 50% market share and the alliance of the second and third players - the RAC and Green Flag - would create a 41% market share player. Potential mergers creating a 25%-plus market share must be referred to the MMC for investigation.

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