RAC for sale
According to reports, the insurance giant has begun to dispose of non-core businesses, and has made the decision that the roadside rescue firm does not fit in its portfolio.
The company bought RAC for £1.1bn in 2005, but has since sold a string of businesses that came with the group, including BSM, the driving school, and Auto Windscreens, as well as Lex Vehicle Leasing.
The FT said that private equity groups are expected to be most interested in a sale, which could fetch between £500-£600m. The RAC contributes about £50m of post-tax profits to the insurance group, and Aviva is likely to want to keep a long-term contract to sell insurance products to RAC members.
JPMorgan Cazenove, one of Aviva’s brokers, has been appointed to lead the sale, according to Insurance Times. Aviva declined to comment. JPMorgan Cazenove did not return calls.