A host of private equity firms including Stockholm-based EQT are circling the AA about a takeover deal which could be worth as much as £5bn.
MEZIESBLOG has learnt that a pack of bidders have expressed interest in acquiring the AA in recent weeks as the breakdown recovery service’s owners explore a potential exit.
The process is at an early stage, and comes amid warnings of impending fuel shortages for motorists as the war in Iran threatens to squeeze supplies to British retailers.
Banking sources said a number of financial investors were interested in a deal to buy the AA, with rival service the RAC currently pursuing a London stock market listing.
The AA has about 16 million customers, including close to 3.5 million members.
Sky News revealed last year that Towerbrook Capital Partners, Warburg Pincus and Stonepeak, which collectively own the AA, had appointed JP Morgan and Rothschild to review the AA’s strategic options.
Stonepeak invested £450m into the company in a combination of common and preferred equity, in a transaction which completed in July 2024.
That deal was undertaken at an enterprise valuation – comprising the AA’s equity and debt – of approximately £4bn, the shareholders said at the time.
The AA, which has a large insurance division as well as its roadside recovery operations, is steadily reducing its debt burden as profits improve.
The company has been through a succession of owners during the last 25 years.
In 1999, it was bought by Centrica, the owner of British Gas, for £1.1bn.
It was then sold five years later to CVC Capital Partners and Permira, two buyout firms, for £1.75bn, and sat under the corporate umbrella Acromas alongside Saga for a decade.
The AA listed on the London Stock Exchange in 2014, but its shares endured a miserable run, being taken private nearly seven years later at little more than 15% of its value on flotation.
Under the ownership of Towerbrook and Warburg Pincus, the company embarked on a long-term transformation plan, recruiting a new leadership team in the form of chairman Rick Haythornthwaite – who also chairs NatWest Group – and chief executive Jakob Pfaudler.
For many years, the AA styled itself as “Britain’s fourth emergency service”, competing with fierce rival the RAC for market share in the breakdown recovery sector.
Founded in 1905 by a quartet of driving enthusiasts, the AA passed 100,000 members in 1934, before reaching the one million mark in 1950.
Last year, it attended 3.5 million breakdowns on Britain’s roads, with 2,700 patrols wearing its uniform.
The company also operates the largest driving school business in the UK under the AA and BSM brands.
In the past, it has explored a sale of its insurance arm, which also has millions of customers, at various points but is not actively doing so now.
The AA and EQT have been contacted for comment.
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