Aviva Buys RAC for £1.1 billion
The RAC has agreed to a £1.1 billion takeover approach from insurer, Aviva. Aviva said buying the RAC would boost its Norwich Union insurance business “creating a powerful new combination in insurance and motoring services.” It added that combining Norwich Union and the RAC would allow cost savings of at least £80m a year in 2006. On Tuesday, RAC shares jumped 19 per cent after it said it had received a bid approach. Aviva, UK’s largest general insurer, could be interested in developing the RAC’s promising financial services business, observers said. The company declined to comment.