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Carlyle Group Purchases RAC - 23 Jun 2011
Insurance group Aviva has agreed to sell the RAC to US private equity firm Carlyle Group, whose portfolio also includes Applus+, for £1bn.
The move is part of Aviva\'s drive to focus on its main insurance and savings operations.
Aviva said it expected to make an accounting profit of £600m from the sale and that it would use the proceeds to strengthen its balance sheet and invest in its priority markets.
The RAC is the UK\'s second-biggest car breakdown service. Based in Birmingham, it employs 4,000 staff and has more than seven million customers.
It made a pre-tax profit of £82m in 2010.
The sale is expected to be completed by the end of the third quarter of 2011.
Under the terms of the deal, Aviva will make a one-off contribution of £67m into the RAC pension scheme, which had a deficit of about £160m at the end of 2010. |
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