Carlyle Buys RAC business from Aviva for $1.6B

Carlyle is paying 1 billion pounds ($1.6 billion) to buy the RAC roadside rescue business from Aviva, Reuters reported. Aviva said it expected to make an accounting profit of 600 million pounds from the sale. The added funds will help Aviva bolster its balance sheet as it continues to tighten focus to its main insurance and savings operations, Reuters said.

(Reuters) – Aviva has agreed to sell its RAC roadside rescue business to private equity firm The Carlyle Group for 1 billion pounds ($1.6 billion), as the British insurer continues its drive to focus on its main insurance and savings operations.

Aviva said it expected to make an accounting profit of 600 million pounds from the sale and that it would use proceeds to strengthen its balance sheet and invest in its main markets.

The firm, which operates in about 30 countries, has been trying to boost profits by concentrating on 12 markets where it makes most of its money. As part of this plan, the company has walked away from less profitable businesses in the U.S. and Italy.

Aviva shares were up 1.2 percent in early morning trade.

($1 = 0.618 British Pounds)

(Reporting by Sudip Kar-Gupta)