RAC sale speculation began in March

Speculation that Aviva was planning to sell RAC begin in March 2011 and followed the earlier sale of a number of subsidiary motoring related businesses that came with the company’s 2005 purchase including Auto Windscreens, Lex (the vehicle leasing company) and the BSM driving school operation.

According to a Financial Times report published in March, Aviva does not disclose financial details about RAC. However records at Companies House show that in 2009 it held a pensions deficit of £315 million. Nevertheless, the report also said that across Aviva group’s pension schemes the deficit was cut to zero during 2010, pointing out that that “does not mean there is no longer a deficit in the RAC scheme.”

However in April The Telegraph reported that together the sold assets earned Aviva between £500 million £600 million, which added to the £1 billion price tag of RAC takes the firm well over the initial price it paid.

In addition to the successful bidder Carlyle Group, buy-out firms Clayton Dubilier & Rice, BC Partners and operational specialists Bain Capital have been linked to the auction of RAC. Clayton Dubilier & Rice also bid for Kwik-Fit during the process that saw it sold to Stapleton’s owners Itochu in March.

Related news:

• Carlyle Group confirms it’s buying RAC from Aviva for £1 billion

• Auto Windscreens enters administration

• Aviva Buys RAC for £1.1 billion