Centrica yesterday confirmed that it was seeking a buyer for the AA, the vehicle and financial services business valued at about £1.3 billion (€1.97 billion) to £1.5 billion.
The sale of the 99-year-old Automobile Association would mark a change in strategy for the group, which has successfully sold a growing range of motoring and insurance products to its AA customers.
Centrica, Britain's largest retail gas and electricity supplier, paid £1.1 billion for the AA in 1999 as part of a diversification strategy, and is expected to use the proceeds to expand its core energy operation.
The AA last year increased profits from £73 million to £93 million. This compares with just £6 million before Centrica bought it. Over that period, the number of AA members has risen from nine million to 15 million.
Centrica would make a substantial profit on the deal, since the AA came with £360 million of cash when it was bought, reducing the effective purchase price to about £850 million.
The Automobile Association, Britain's second-oldest motoring organisation, was formed by car enthusiasts who met at the Trocadero restaurant in London's West End on June 29th, 1905.
For many years, the organisation operated as a mutual association financed by its members' fees. By the late 1990s, following the acquisition of RAC by Lex Services and Green Flag by Direct Line, it had become concerned about its lack of financial muscle to compete with rivals and develop the new products and services demanded by modern motorists.
AA Insurance was launched in 1967, while AA Roadwatch - Europe's biggest traffic broadcaster - started in 1973 with the advent of commercial radio.
Its publishing activities also expanded during the 1990s and the AA is now Britain's biggest travel publisher.
It has developed computer systems and automatic vehicle-location technology, using global positioning satellites, to improve the speed of its roadside response.
