Centrica takes over AA in £billion deal

Centrica, the British gas supply company, has announced that it is buying the AA in a £1.1 billion take-over deal.

Centrica, which has already moved to take its 16.6 million customers into electricity supply, Goldfish credit cards, plumbing services and home insurance, beat other competitors to buy the AA.

An AA spokesperson told i-FM that "Although there was a huge amount of interest, Centrica had the most to offer in fair price and the guarantee of continued high quality services and products.

"Our 4.4 million eligible members will get the opportunity to vote on the proposed acquisition in August," he continued.

The deal is then hoped to be completed in the fourth quarter of 1999. With a £240 windfall offered to eligible members, AA bosses are confident that the deal will go through.

The sale was necessary, we were told, to keep up with changing markets. With both the AA's largest competitors, the RAC and Greenflag, owned by external companies, the AA felt they "needed extra support... it was the best we could do for our members and staff."

Sir Brian Shaw, chairman of the committee of the AA, said the Centrica deal would mean that the "interests of the AA, its members, customers and staff, will be better served by being part of a larger group."

Both companies have extensive customer service operations. Duplication is likely to be an issue for the future.

Julie Crisp