Aviva is selling RAC, the motoring services provider, to asset management company The Carlyle Group.
The £1bn deal is expected to complete at the end of Q3 2011, subject to regulatory and competition approvals.
RAC provides services to carmakers in the UK including Volkswagen Group, Hyundai, Kia, Mazda, Porsche and Ferrari, as well as its own branded RAC breakdown, insurance and motor claims services.
The RAC management team has a strategy, which is fully endorsed by Carlyle, to optimise the roadside recovery business, grow the insurance and financial services business, and diversify further into motor services and other personal finance-related products in the longer term.
Angela Seymour-Jackson, CEO of RAC said: “We are very excited to be partnering with Carlyle, since its financial strength and experience in the motor services industry will be very valuable to us.
"This investment will enable us to enhance our current customer offering as well as diversify into new business areas. Carlyle has recognized that RAC is a high-quality business with significant growth potential. We have enjoyed an excellent partnership with Aviva, and are looking forward to our next phase of growth under new ownership."
Andrew Burgess, managing director of The Carlyle Group, said: “We are delighted to be acquiring RAC, a renowned brand synonymous with trust and reliability. We see great opportunity to enhance the roadside business with an emphasis on ensuring customer satisfaction at both the consumer and corporate levels.
"There is also strong longer term potential to grow the business by investing in new and innovative financial services offerings such as motor and household insurance. We look forward to leveraging our industry network and deep sector expertise to enable RAC to reach its full potential."
RAC Warranty, run by The Warranty Group, is not affected.