The two businesses will operate under a new holding company and are expected to integrate their call centres and back office functions to improve efficiency. This has raised fears in the GMB union of job cuts.
Tim Parker, AA chief executive for the past three years, will stand down once the transaction is completed. Saga’s chief executive Andrew Goodsell will head the combined group and expects to transfer best practice to the AA, which he said had failed to engage properly with its 15m roadside recovery members.
Under the terms of the £6.2bn deal, Saga’s private equity owner, Charterhouse, and the AA’s private equity owners, Permira and CVC Capital, will share dividends of at least £2bn.