Future commercial relationship between Aviva and RACThe sale of RAC is consistent with Aviva UK’s strategy of maximising the benefits of operating life and general insurance together under one strong brand. Aviva will continue its commercial relationship with RAC both as a key underwriter of motor insurance on RAC’s panel and as a partner, selling RAC breakdown cover to Aviva’s customers. As RAC develops its business and extends its product offering both parties will seek to find new areas where they can work closely together. J.P. Morgan Cazenove acted as sole financial adviser to Aviva. Notes to editors: About RAC
- RAC was acquired in 2005 for an equity value of £1.1 billion.
- Aviva subsequently streamlined the business, disposing non-core businesses raising approximately £0.5 billion.
- RAC is the second largest roadside assistance provider in the UK, offering vehicle breakdown repair and recovery through a nationwide, branded patrol force, as well as providing other motoring related services, to over 7 million customers.
- RAC also offers insurance broking, legal and motor claims services.
- RAC has approximately 4,000 staff and is headquartered in Bescot, Birmingham
- In the year ended 31 December 2010 (unaudited), RAC results were:
- Profit before tax of £82 million**.
- Net earnings of £59 million**.
- Gross assets of £0.7 billion.
- At completion, RAC’s net assets are expected to be £0.4 billion.
- Aviva is the world’s sixth largest insurance group, serving over 53 million customers across Europe, North America and Asia Pacific
- Aviva’s main business activities are long-term savings, general insurance, and fund management, with worldwide total sales*** of £47.1 billion and funds under management of £402 billion at 31 December 2010
- We are the largest insurance services provider in the UK and one of the leading providers of life and pensions products in Europe
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** Adjusted to exclude pension curtailment gains, profit on the disposal of a subsidiary and, in relation to net earnings, normalisation of tax charge.*** Based on 2010 published life and pensions PVNBP on a MCEV basis, total investment sales and general insurance and health net written premiums, including share of associates' premiums. This announcement has been issued by and is the sole responsibility of Aviva. No representation or warranty express or implied, is or will be made as to, or in relation to, and no responsibility or liability is or will be accepted by J.P. Morgan Limited (which conducts its UK investment banking activities as J.P. Morgan Cazenove) (“J.P. Morgan Cazenove”) or by any of its affiliates or agents as to or in relation to, the accuracy or completeness of this announcement or any other written or oral information made available to or publicly available to any interested party or its advisers, and any liability therefore is expressly disclaimed. J.P. Morgan Cazenove, which is authorised and regulated by the Financial Services Authority, is acting as sole financial adviser to Aviva and no one else and will not be responsible to anyone other than Aviva for providing the protections afforded to clients of J.P. Morgan Cazenove.