Saga and the AA have announced surprise merger plans in a move creating a motoring and insurance giant worth £6 billion.
Saga, which specialises in insurance and travel for the over-50s, will establish a new holding company with the AA, which boasts 15 million motorists as members.
Both companies are owned by private equity firms - Saga is controlled by Charterhouse while the AA is owned by Permira and CVC.
Permira and CVC will own 42.5% of the business, while Charterhouse will hold 37.5% and the management and staff of both businesses the remaining 20%.
Saga will have control of the combined business although both firms will continue to trade separately.
The combination of the businesses, which is subject to approval from regulators, is valued at £6.15 billion with the AA worth £3.35 billion and Saga £2.8 billion and will create a company with more than 11,000 employees.
Saga is aiming to target the AA's 50-plus members with its products while offering AA services to its own 2.5 million customers.
Chief executive Andrew Goodsell, who will head up the combined company, said the two brands were complementary.
Paul Maloney, national officer of the GMB union said: "By our reckoning, the managing partners stand to make £300 million from owning the AA for less than three years.
"The chief executive of the AA, Tim Parker, will make £80 million alone. This shows the extent to which we have entered into a casino economy. This money was made on the back of sacking 3,500 people, cutting wages and call centre staff and lengthening the working day."
