Aviva announces RAC takeover - 09/03/2005
Britain's biggest insurer Aviva has agreed a £1.1 billion takeover of the RAC.
The company has welcomed the move as the creation of " a powerful new combination in insurance and motoring services".
Aviva said combining its Norwich Union insurance group and the RAC would deliver annual pre-tax cost savings of at least £80 million by 2006.
The RAC has around 6.7 million roadside assistance customers, and about 275,000 motor and home policyholders. The company also operates BSM driving schools.
"We are excited about the revenue opportunities from this combination," said Norwich Union chief executive Patrick Snowball. "When it comes to their car, we will help our customers learn how to drive it, buy it, insure it and, if things go wrong, get them back on the road fast."
Aviva said it would cut about 1,700 UK jobs as a result of the takeover - 900 head office jobs are due to go, while 800 administration and processing jobs will be moved outside the UK. The job cuts will be from both Aviva and RAC and the company says it will try to avoid compulsory redundancies.
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