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AA considers pounds 1.5bn sale members selling up

Nigel Cope Associate City Editor
Tuesday 20 April 1999 18:02 EDT
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MEMBERS OF the Automobile Association, Britain's biggest motoring organisation, could be in line for windfall payments of more than pounds 300 because the group is considering strategic options that could end its mutually owned status.

The AA could be sold to another motoring group in a pounds 1.5bn deal. As the AA is a mutually owned, non-profit organisation, the proceeds would be distributed to the 4.3 million full members. But the 1.7 million associate members, such as the spouses of members and children under 21 named on the membership forms, would not qualify for a payout.

Ford, the US motor giant that paid pounds 1bn for Kwik Fit earlier this month, might be interested in acquiring the AA. But it is thought the AA is a long way from any deal and is merely exploring its options as competition in the roadside breakdown market hots up.

An AA spokesman said: "The AA has always kept in mind its prime purpose - to serve the best interest of our members. No decisions have been made."

The move follows the RAC decision to sell its motoring services division for pounds 450m to Cendant, a US group that owns Green Flag. This was blocked by the competition authorities last year.

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