Aviva today announced the terms of a £1.1bn recommended bid for motoring group RAC.
And the board of RAC said they unanimously recommend that the cash and shares offer be accepted, because it is in the best interests of RAC shareholders.
RAC said: “The price being offered by Aviva reflects the strength of RAC's businesses, its brands and the potential for future growth.”
The acquisition would bring together Norwich Union Insurance (NUI), the UK's number one general insurer, with RAC, which has over 6 .7m roadside assistance customers.
Aviva said they expect the combination of NUI and RAC to generate substantial revenue benefits and enable total pre-tax cost savings of at least £80m per year by 2006.
RAC shareholders have been offered 0.7154 new Aviva shares and 462.5p in cash for every one RAC share.
Details of the offer will be dispatched to RAC shareholders within 28 day. A spokesperson for Aviva said they expected the deal to be completed by mid-May.