Fleet News

£1.1 billion deal sees AA bought by Centrica

BRITAIN'S biggest motoring organisation, the Automobile Association, is to be bought by energy, home services and finance supplier Centrica for £1.1 billion. The joint announcement by the two organisations ends months of speculation as to the future ownership of the 94-year-old 'mutual' AA and comes midway through the biggest shake-up in the history of the UK's vehicle breakdown and recovery industry.

The AA's chief rival, the RAC, is in the process of being acquired by Lex Service for £437 million, with the deal due to be finalised by the end of the month, while the third major player in the market, Green Flag, is being sold by Cendant Corporation. The Centrica acquisition, which is subject to the satisfaction of various conditions, including the approval of AA members, is expected to be completed in the final three months of this year subject to members' approval and clearance from competition authorities and insurance regulators.

Centrica - which says it will preserve the AA's role as an independent voice for the interests of motoring - says it will invest in and develop the liveried roadside recovery business operated by the AA while maintaining service standards and customer satisfaction levels. In justifying the bid, Centrica said the two organisations had similar core operations - marketing, call centres and work management systems supporting field-based workforces of engineers and patrols. As a result Centrica and the AA say that bringing together complementary core operations and skills will improve services.

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