News

The £6bn merger between the AA and Folkestone based Saga has been given the green light.

EU antitrust regulators gave the go ahead today (10 September) to a merger of the Automobile Association with travel and insurance firm Saga after determining that the deal would not stifle competition.

"The (European) Commission has concluded that the transaction would not significantly impede effective competition," the European Union's top antitrust regulator said in a statement.

Although both AA and Saga provide breakdown services in Britain, the Commission said Saga's share of the market was too small to pose serious competition problems.

AA, which is owned by private equity groups Permira and CVC, and Saga, by buyout group Charterhouse, announced in June that they would merge to create a group worth 6.15 billion pounds.

Saga has flourished since Andrew Goodsell, 48, led the management buy-out from its founders, the de Haan family and its turnover has jumped by 80% since 2004.

Started in 1951 as a single hotel in Folkestone, it now has a database of 7.6m customers and more than 2,500 staff. According to the thisismoney.co.uk website most of them will benefit from the merger, receiving an average of £8,000 cash and £2,500 of shares in the new company.

Chief executive Andrew Goodsell, who will run the organisation from Saga's base in Folkestone has dismissed union warnings that more jobs would be lost, saying: 'I'm about growing this business.'