American car dealer AutoNation is considering a bid for the UK operations of Inchcape, reported Sky News citing sources.
With a market capitalisation of nearly £5.5bn, AutoNation is among the potential buyers since Inchcape announced a strategic review in January 2024.
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People familiar with the development told the publication that the deal could be valued at around £350m and would signal AutoNation’s foray into the UK market.
AutoNation is in the preliminary stages of contemplating an offer for Inchcape’s UK division, the sources said.
However, it is uncertain whether AutoNation will proceed with a bid.
If the deal materialises, it will mark a significant move for AutoNation, which has previously shown interest in the UK market by engaging in a bidding war for Pendragon, another car dealer based in London.
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By GlobalDataThe potential sale of Inchcape’s UK operations is part of an ongoing transformation within the industry.
Last year, Lithia Motors acquired Jardine Motors from Jardine Matheson Holdings and agreed to purchase Pendragon’s dealerships and leasing businesses.
Lookers Motor Group was acquired by Canada’s Alpha Auto Group in a £465m deal.
Inchcape’s UK division operates 70 sites and employs 3,700 staff, representing manufacturers such as Audi, BMW, Jaguar, Toyota and Volkswagen.
The disposal of its UK dealerships would enable Inchcape to concentrate on its distribution activities, which are present in over 40 countries and contribute to more than 90% of the group’s profits.
An industry source highlighted that moving away from the UK car dealership market could improve market perceptions of Inchcape, potentially leading to a higher stock valuation.
Over the past year, Inchcape’s shares have seen a slight increase, resulting in a market capitalisation of £3bn.
With a history dating back to 1847, Inchcape has been actively expanding internationally in recent years, acquiring businesses in China, Australia, and mainland Europe.
The sale of its UK retail business, which is a relatively small contributor to the group’s overall profitability, would be a landmark decision for the company.
The ongoing consolidation in the industry could leave Vertu Motors as the sole London-listed UK car dealer if the Inchcape sale proceeds.
AutoNation did not respond to requests for comment, and Inchcape declined to comment on the news.
