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Daily Insurance Industry News
Thursday 20th of September 2018
June 23, 2011

Aviva sells RAC for £1bn

by Gill Montia

Story link: Aviva sells RAC for £1bn

Aviva sells RAC for £1bn

Aviva has agreed to sell RAC to Carlyle Group.

The UK’s second-largest roadside assistance provider will change hands for £1 billion and the transaction should be completed by the end of the year.

Carlyle Group, which is described as a global alternative asset manager, says it will be “fully supportive” of the RAC management team and its strategy to profitably grow the business.

Explaining the disposal, Aviva group chief executive, Andrew Moss, says: “The sale of RAC is another important step for Aviva and realises significant value for our shareholders.”

He adds: “Together with the recent partial disposal of Delta Lloyd, it demonstrates clear delivery of our strategy and provides the flexibility to deepen our presence in the priority markets where we have strength and scale.”

Based on 31st December 2010 results, the move will increase Aviva’s net assets by £0.6 billion and tangible net assets by £1 billion, or around 37p per share.

Accounting profit on disposal is expected to be £0.6 billion, however, Aviva will retain the RAC (2003) pension scheme, which at 31st December 2010 had a deficit of approximately £160 million.

On completion, the group will make a one off contribution of £67 million into the scheme.

 

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