Car recovery firm RAC sold for £1bn

22/06/11

By Dominic Rees

Aviva said it expects to book a profit of £600 million after it announced the sale of breakdown recovery group RAC for £1 billion.

The Birmingham-based breakdown recovery company has been bought by private equity group Carlyle, who said that the RAC's management, which is led by managing director Angela Seymour-Jackson, will stay with the business.

The group has about seven million customers and made profits last year of £82 million, possibly helped by the rise in motorists needing help during the severe winter weather.

The sale of RAC, which Aviva bought for £1.1 billion in 2005, comes after the insurer offloaded other divisions such as the BSM motoring school and Auto Windscreens.

Aviva said the decision to sell the RAC is consistent with its strategy to focus on insurance and savings products, though bosses did say that it will seek to find new areas where it can work with the breakdown group as the RAC develops its business.