Centrica sells AA, looks to acquire energy assets

British utility Centrica is to sell its Automobile Association (AA) motoring organisation for £1.75 billion to private equity firms CVC and Permira. The sale will raise cash to pay a higher dividend and buy back shares and Centrica will also use the proceeds to increase its planned investment in energy assets over the next five years to support its downstream activities.

Centrica said it will return £1.5 billion to investors through the share buyback and a special dividend, and has targeted further investments of anywhere between £2 billion to £3 billion in energy assets.

In February of this year, Centrica highlighted its plans to invest more heavily in strategic energy assets. Since then, a number of energy asset investments have been successfully completed, including the acquisition of a 33% interest in the Statfjord field on the Norwegian continental