The UK’s two largest motor retail training organisations have merged, creating a business with almost 55% of the market in automotive apprentice training.

Motor retail training specialist Carter & Carter has bought Remit, the training division of the Retail Motor Industry Federation, in a £25.5m deal. The cash, raised mostly from a share issue, will allow the RMIF to plug the £5.6m hole in its pension scheme and fund future activities.

Carter & Carter will now train around 12,000 of the 22,000 automotive apprentices in the UK. Its contracts with carmakers include VW Group, Toyota, Mercedes-Benz, Ford, Vauxhall, Renault, Peugeot, Citroen and Suzuki.

Managing director David Carter says he is not concerned about a monopoly issue arising and had sought legal advice, although did not consult the Office of Fair Trading. The merger has been commended by both Automotive Skills and the Institute of the Motor Industry.

Matthew Carrington, RMIF chief executive, says it had not considered selling Remit until it received an approach from Carter & Carter earlier this year. He insists the sale was not led by a need to resolve the pension deficit. Rather, he says, the RMIF did not – and would not – have the financial muscle to enable Remit to grow, unlike its new owners.

The offer was unanimously approved by the RMIF’s board at an extraordinary general meeting on Monday last week.

Carrington adds: “This gives us an opportunity to develop the RMIF for the future. We will be consulting our members to ask how they want us to invest this and how we should develop to meet their requirements.”

Some industry analysts are surprised that the trade association decided to sell the business which has been responsible for most of its revenue. Of the RMIF’s £29.3m 2004 turnover, £25m was generated by Remit, which also made profits of £600,000 against the RMIF’s £1.36m loss. Remit has training centres in Croydon and Leeds, and seven regional offices.

One analyst, who asked to remain anonymous, says: “If the RMIF doesn’t invest this wisely it might get seven years down the line and find that the money is running out.”

David Carter does not rule out dropping the Remit name, but says there are no immediate plans to rebrand. Carter & Carter still uses the Emtec and ASSA brands after acquiring those businesses in recent years.

He adds: “It largely depends on who your audience is. Vehicle manufacturers are not concerned about which branding the training is delivered under, and indeed it is often provided by us as a ‘white label’ solution. The City tends to like a plc name that it is familiar with, and the independent garage sector is still very comfortable with the Remit brand.”

As far as restructuring the business, Carter says there is an integration plan, but this will happen slowly. “We want people in Remit to feel part of Carter & Carter and our clients to receive the best possible provision.”