Aviva bought the RAC in 2005 for ?1.1bn Insurance group Aviva has agreed to sell the RAC to US private equity firm Carlyle Group for ?1bn.The move is part of Aviva's drive to focus on its main insurance and savings operations.
Aviva said it expected to make an accounting profit of ?600m from the sale and that it would use the proceeds to strengthen its balance sheet and invest in its priority markets.
The RAC is the UK's second-biggest car breakdown service.
Based in Birmingham, it employs 4,000 staff and has more than seven million customers.
It made a pre-tax profit of ?82m in 2010.
Aviva shares were up 1.2% in morning trading.
The sale is expected to be completed by the end of the third quarter of 2011.
Under the terms of the deal, Aviva will make a one-off contribution of ?67m into the RAC pension scheme, which had a deficit of about ?160m at the end of 2010.
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