£6 Billion SAGAA: Folkestone based Saga and AA Announce Merger
June 25, 2007 12:33 PM
The BBC are reporting that Folkestone and Sandgate based Saga, which sells holidays and other products to the over-50s, is to merge with motoring giant AA in a deal valuing the combined firm at £6.15bn.
The deal, creating a company with more than 11,000 employees, would value the AA business at about £3.3bn. The merger values Saga at about £2.8bn. Saga is also owned by a private equity firm, having been bought by Charterhouse for £1.35bn in 2005 from the previous owner Roger De Haan.
Following the deal, Permira and CVC will own 42.5% of the business, while Charterhouse will hold 37.5% and the management and staff of both businesses the remaining 20%.
Saga was founded in 1951 as a single hotel in Folkestone, but now has a database of 7.6 million customers and more than 2,500 staff.
Trade unions have led a high-profile campaign against job losses at the AA, which they have cited as an example of what they say is ruthless cost-cutting by private equity firms.
Shepway Lib Dem Council Group Leader, Lynne Beaumont, commented:
"Saga is hugely important to Shepway, and clearly given the staff reductions seen at the AA over recent years, local people need to hear real guarantees as soon as possible for the staff here.
"Hopefully however, the new merged firm will recognise the excellent team in Shepway that have powered the development of Saga, and that we will see new opportunities and new staff brought to Shepway in the long term as a part of this deal."
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