Saga, the over-50s travel and insurance group, is to be merged with the Automobile Association, with head offices in Basingstoke, in a £6.2bn deal.Saga’s 3,900 staff will join the AA’s 7,200 employees under the combined ownership of the private equity houses Permira, CVC and Charterhouse. Permira and CVC have owned the AA since 2004.

The two companies will continue to operate in their different separate fields, but are expected to benefit from the sharing of expertise, with each being able to offer its services to the customers of the other. Saga Chief Executive, Andrew Goodsell, will head up the new company, while the AA CEO, Tim Parker, has signalled his intention to pursue new business projects outside the AA, once the transaction is completed.

Andrew Goodsell said:

These are two great brands, in different and complementary business areas, but they have many features in common. Both organisations can grow and benefit from sharing expertise and systems. We also see great opportunities to offer Saga’s products to the AA’s 50+ members, and the AA’s products to Saga customers. This is a great deal for both brands.

Union leaders were quick to raise concerns about the potential of job cuts that may affect the Basingstoke workforce. Alistair MacLean of the AADU, which claims to speak for 4,500 AA staff commented:

They say these two businesses are going to be run separately but when you eat out at a restaurant you don’t need two sets of cutlery, do you?”

Areas of overlap between the business include call centres, head offices and insurance operations. Saga has a large and fast-growing home and motor insurance arm and Mr Goodsell is keen to develop a similar growth division at the AA.

Completion of the transaction is subject to regulatory approval.