Business News

US giant AutoNation plans to take the wheel at Inchcape UK

A New York-listed car dealer is preparing a bid for Inchcape’s UK operations.

Sky News has learned that AutoNation, which has a market capitalization of almost $7bn (£5.5bn), is among the suitors circling the company since Inchcape confirmed in January that it conducted a strategic review.

AutoNation is reportedly in the early stages of considering an offer and may not yet decide whether to pursue it, according to industry sources.

If it goes ahead, it would represent a first move into the UK for AutoNation after it withdrew six months ago from a bidding war for Pendragon, another London-listed car dealership.

A deal could be worth around £350million, according to insiders.

AutoNation did not respond to multiple email and telephone requests for comment.

The sale of Inchcape’s UK operations would mark another step in the sector’s ownership shake-up.

Last year, Lithia Motors hit a bargain to acquire Jardine Motors, the UK-based company of Hong Kong conglomerate Jardine Matheson Holdings.

Lithia also agreed to purchase Pendragon’s dealerships and rental operations.

Furthermore, Lookers was sold to the Canadian group Alpha Auto in a £465m deal.

The Inchcape UK division comprises 70 sites, employing 3,700 people and works with car manufacturers including Audi, BMW, Jaguar, Toyota and Volkswagen.

Sources told Sky News in January that the sale of its UK dealerships would leave Inchcape free to focus on its higher margin distribution activities in more than 40 countries around the world.

Read more on Sky News:
The CBI extends its overdraft to consolidate its finances
Thames Water boss refuses to rule out bill increase
The “Crypto King” sentenced to 25 years in prison

One added that moving away from the market perception of the company as a UK-focused car dealership should enable its board to score higher on its actions.

Shares in the company have risen slightly over the last year, leaving it with a market capitalization of £3 billion.

The sale of its UK operations would be a historic step for Inchcape, whose origins date back to 1847, when William Mackinnon and Robert Mackenzie formed a general trading company.

Inchcape Group was listed on the London Stock Exchange in 1958 as IGD.

It began operating under its current identity in 1981.

Follow Sky News on WhatsApp

Keep up to date with all the latest news from the UK and around the world by following Sky News

Tap here

In recent years, it has pursued aggressive international expansion, acquiring businesses in China, Australia and continental Europe.

The distribution business now accounts for more than 90% of Inchcape Group’s profits, meaning its UK retail operations are a relatively insignificant part of the group in terms of profitability.

If the sale of Inchcape goes through, Vertu Motors will become the only British car dealership listed in London.

Inchcape declined to comment.

Related Articles

Leave a Reply

Your email address will not be published. Required fields are marked *

Back to top button