Elderly services firm Saga and emergency rescue service AA have announced plans to merge their businesses in a deal valuing the combined company at £6.15 billion.
Under the terms of the merger, both firms will retain their specialist focus but will open up the services they offer to customers of the other's products.
As a result older AA customers will receive insurance and holiday deals while Saga's customers will be eligible for roadside assistance.
Both companies are notable for being controlled by private equity firms, having been bought out in separate deals in 2004. AA are owned by Permira and CVC, which together hold a 43 per cent stake, while AA were bought by Charterhouse.
The new firm, which will employ over 11,000 people, is expected to be controlled by Saga. It will be headed by Saga's current chief executive Andrew Goodsell as his AA counterpart, Tim Parker, has said he will leave his post "once the transaction is completed".
Mr Goodsell said: "We have taken a really close look and concluded that that there are significant advantages in combining Saga and the AA's experience, expertise, systems and negotiating power, while maintaining their separate and very distinct brands and personalities.
"Saga has an absolute focus on understanding customers and excellence in service, and this fits very well with the AA's relationship with its members."
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