Thursday, September 16, 1999 Published at 14:03 GMT 15:03 UK
Business: The Company File
AA members accept takeover
Millions of AA members will receive windfalls
Members of the Automobile Association have voted overwhelmingly in favour of a £1.1bn ($1.78bn) bid for the mutually owned roadside breakdown group from the energy supplier, Centrica.
In a statement released at the end of a special general meeting, the AA said 96% of the votes cast by proxy ahead of the meeting were in favour, on a turnout of about 67% of the four-million members eligible to vote.
Members will receive windfall payments of £248 each by the middle of next month.
The AA Committee had recommended acceptance of the offer by Centrica.
Founded in 1905, the AA currently has 48% of the car breakdown services market.
"Members will not see an awful lot of difference after the sale, except better services," it said. "We have got to keep up with the competition and this is the only way forward."
Centrica - better known to most people as British Gas in England and Wales and Scottish Gas in Scotland - plans to draw the AA's roadside breakdown, insurance and financial services activities into its growing portfolio of home services.
The company already has interests in electricity supply, credit cards, home insurance, and plumbing and domestic appliance repairs.
'Scope for growth'
Centrica chief executive Roy Gardner said that only 25% of British Gas customers were AA members, with probably a further 25% belonging to other breakdown organisations.
"That gives us a lot of scope for growth," he said.
The company has committed itself to maintaining and improving the AA's services, and has also said that the AA will retain its role as an independent voice for motorists.
However, it also plans to make savings at the AA, through job cuts.
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