Hyundai Cars, part of the RAC’s manufacturer support services division, will remain in the RAC group if Aviva’s £1.1bn bid for the roadside assistance brand is successful.

Up to 900 jobs will be lost within the larger group but the RAC brand name will be retained.

The RAC board has recommended the bid to its shareholders. Aviva expects the takeover to be finalised by mid May. The offer gives a 27% premium over the value of RAC shares on the day before the bid was announced. Some City commentators believe the bid is over-valued and that the proposed benefits are unlikely to be realised.

Patrick Snowball, chief executive of Aviva-owned Norwich Union, said at the presentation of the bid to analysts: “Although Hyundai Cars does not have a natural fit with the rest of the business, it is very profitable so we have no plans to change.”

A spokesman for Hyundai said he had nothing more to add to Snowball’s statement. Aviva, the world’s fifth largest insurance company, says the deal means it can offer UK customers a more comprehensive motoring service.

“The acquisition is particularly important to NU, bringing another important piece of the jigsaw together to create a powerful cradle-to-grave service, from learning to drive to insurance, finance and roadside assistance,” says an Aviva spokesman.

Aviva expects to achieve cost savings and revenue growth. Back-office functions will be combined and efforts to cross-sell will be stepped up. It aims to increase the number of RAC customers who buy more than one product from 13% to 50%.