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CVC: AA to remain independent

CVC Capital Partners and Permira have insisted that they have no plans to merge its AA and Kwik-Fit operations after the recent acquisition of the AA from Centrica for £1.75bn. Both parties say they intend to run the AA as an independent company.

They say they plan to invest in the business and to float it on the Stock Market within the next five years. But industry experts believe unprofitable parts of the AA will be sold off.

“CVC and Permira will want to add value within five years at the maximum. They will not be in it for the long term,” says analyst Brian Taylor. “That added value will be recouped by selling on all or parts of the business. Before that they need to add to the value by restructuring or increasing profitability by centralising functions, closing unprofitable outlets and growing sales.”

Kwik-Fit is still the leading fast-fit chain with 699 sites. The AA has 126 service centres across the country. The AA’s businesses include roadside recovery, insurance, personal loans, mobile tyre fitting and driving schools. Sir Trevor Chinn, chairman of Kwik-Fit will take on the role of chairman of the AA. Tim Parker, will become chief executive of the AA, stepping down as chief executive of Kwik-Fit to become deputy chief executive.

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