Aviva, the parent company of York-based Aviva Life and Pensions, is to sell RAC to The Carlyle Group for £1 billion.

The price of the second- largest UK roadside assistance provider represents 17 times the RAC’s 2010 net earnings.

Announcing the sale, Aviva said it was consistent with its strategic focus on insurance and savings businesses in its priority markets. Completion, which is subject to regulatory and competition approvals, is expected at the end of the third quarter of this year.

Carlyle, a global alternative asset manager, said it was “fully supportive of the RAC management team” led by managing director Angela Seymour-Jackson, and its strategy to profitably grow the business. No redundancies among RAC’s 4,000 employees are anticipated.

Andrew Moss, group chief executive of Aviva, said: “The sale of RAC is another important step for Aviva and realises significant value for our shareholders.

“Together with the recent partial disposal of Delta Lloyd, it demonstrates clear delivery of our strategy and provides the flexibility to deepen our presence in the priority markets where we have strength and scale.”

Based on December 2010 results, the transaction will increase net assets by £0.6 billion.