Offer for shares for RAC plc

Aviva PLC
09 March 2005





NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN, INTO OR FROM THE UNITED STATES,
AUSTRALIA, CANADA OR JAPAN

9 March 2005

AVIVA BRINGS TOGETHER NORWICH UNION INSURANCE AND RAC

Creating a powerful new combination in insurance and motoring services and delivering substantial value potential to 
Aviva and RAC Shareholders


Summary

The boards of Aviva and RAC announce the terms of a recommended cash and share offer, to be made by Goldman Sachs and 
JPMorgan Cazenove on behalf of Aviva, the world's fifth largest insurance group, for the entire issued and to be issued
share capital of RAC, a leading UK motoring services provider, for approximately £1.1 billion. (1)

The board of Aviva believes that the Acquisition will accelerate the growth and profitability of NUI, Aviva's UK 
general insurance business, strengthening its position as the UK's number one general insurer (with 15 million 
policyholders) and creating a powerful new combination in insurance and motoring services. The Acquisition will bring 
together RAC's powerful brand and customer base (including 6.7 million roadside assistance customers) with NUI's 
complementary expertise, where it already insures one in seven of all UK motor vehicles and has a leading position in 
private motor insurance.

The board of Aviva believes that this Acquisition will generate substantial value for Aviva's and RAC's Shareholders, 
an improved range of products for customers and opportunities for employees in the Enlarged Aviva Group. The 
combination of NUI and RAC is expected to generate substantial revenue benefits and cost savings across the combined 
businesses with total pre-tax cost savings of at least £80 million per annum to be achieved in 2006. (2)
 
The Acquisition is expected to be cash flow and earnings enhancing (on a modified statutory operating earnings per 
share basis and on an EEV operating earnings per share basis) for Aviva in 2006, being the first full year following 
completion of the Acquisition. It will also enhance the Aviva Group's return on capital employed from 2006. (3) (4) 
(5) (6)

The board of RAC believes that the Offer is in the best interests of RAC Shareholders and, therefore, unanimously 
recommends that they accept the Offer. The price being offered by Aviva reflects the strength of RAC's businesses, its 
brands and the potential for future growth through the combination of RAC and NUI.


The Offer

-   0.7154 New Aviva Shares and 462.5p in cash for every 1 RAC Share. A Mix and Match Facility will also be available.

-   Based on the Closing Price of an Aviva Share on 8 March 2005, being the last Business Day before this announcement,
    the Offer values each RAC Share at approximately 925p and the existing issued share capital of RAC at approximately
    £1.1 billion (after taking account of Aviva's proposed final dividend of 16p per share for the year ended 31 
    December 2004, to which RAC Shareholders will not be entitled). (1)

-   In addition, RAC Shareholders will retain the right to receive the proposed RAC final dividend of 15.6p per share 
    for the year ended 31 December 2004, which is expected to be paid on 5 May 2005. 

-   Including the proposed RAC final dividend payable to RAC Shareholders, the value of the Offer represents a  premium
    of approximately 27 per cent. over the Closing Price of a RAC Share of 742p on 7 March 2005, the last Business Day
    before the announcement by RAC that it had received an approach. 

-   Including the proposed RAC final dividend payable to RAC Shareholders, the value of the Offer also represents
    a premium of approximately 34 per cent. over the average Closing Price of a RAC Share of 703p for the month before
    the announcement by RAC that it had received an approach. 

-   Irrevocable undertakings to accept the Offer have been received from the directors of RAC who hold RAC Shares, 
    representing approximately 0.2 per cent. of RAC's existing issued share capital.

-   The conditions to and certain further terms of the Offer are set out in Appendix I to the full announcement. 


Acquisition rationale

NUI is a market leader in private motor insurance in the UK. In recent years, NUI has built on its core insurance 
business to provide a wide range of related services, such as roadside assistance, Pay As You DriveTM insurance and 
vehicle checks. 

This expansion has positioned NUI at the forefront of a changing market where customers now buy a broader range of 
products from trusted brands and where low cost, quality service and convenience have become paramount. This plays to 
the strengths of providers with direct distribution and well-recognised brands. 

Against this background, the combination of NUI and RAC, which have complementary expertise in motor insurance and 
motoring services, has the potential to deliver significant benefits to shareholders and customers.

In particular, the Acquisition:

-   accelerates NUI's strategic objective to capitalise on changes in the market place and capture high value 
    business by moving closer to customers and offering a broader range of products and services;

-   provides access to RAC's 2.2 million individual roadside members;

-   enhances NUI's partnership business by bringing new distribution partners with an additional 4.5 million 
    corporate roadside customers, and the potential to develop RAC's current partnership relationships with a broader 
    range of products and services;

-   delivers a route to realise the potential of the RAC brand in insurance and financial services - areas where 
    RAC already has ambitious plans for expansion;

-   is expected to create total pre-tax cost savings across the combined businesses of at least £80 million per annum 
    to be achieved in 2006; (2) and

-   is expected to be cash flow and earnings enhancing (on a modified statutory operating earnings per share basis and 
    on an EEV operating earnings per share basis) for Aviva in 2006, being the first full year following completion of
    the Acquisition, and beyond. (3) (4)(5)

RAC is already one of NUI's largest suppliers. It has provided the motor claims notification customer helpline, roadside
recovery and a roadside assistance service offered as an addition to NUI motor insurance policies for ten years. RAC has
provided underwriting of NUI's motor legal expenses cover and operated its motor legal expenses claims handling service
for seven years. For the last two years it has provided services to NUI's own branded roadside assistance product.


Synergies (2)

The combination of NUI and RAC is expected to generate substantial synergies, both in terms of additional revenue 
benefits and cost savings. The revenue benefits are anticipated to arise from a number of areas, including: (2)

-   in direct insurance, selling additional products to RAC's membership base from a rate of 13 per cent. 
    currently owning more than one product to over 50 per cent., using NUI's expertise and accelerating plans that RAC 
    already has in place in this market;

-   increasing sales of financial services products such as providing car loans to RAC's customers where the RAC
    brand is currently considered not to have reached its full potential;

-   increasing roadside assistance sales to NUI's customers, supported by RAC's position as a leading provider in that 
    market; and

-   realising the full potential of the RAC brand, which is one of the largest independent providers of motoring 
    services in the UK.

In 2006, total pre-tax cost savings across the combined businesses are expected to be at least £80 million per annum. 
The cost savings are anticipated to arise from removing duplication, supply chain savings and some offshoring of back 
office and administration roles. It is not intended to move customer-facing front office operations offshore. (2)


The Offer Document, containing the full terms and conditions of the Offer, will be despatched to RAC Shareholders 
within 28 days of this announcement unless otherwise agreed by the Panel.

Aviva is being advised by Goldman Sachs and JPMorgan Cazenove. RAC is being advised by Lazard. Hoare Govett is acting 
as broker to RAC.


Quotations

Commenting on the Offer, Richard Harvey, group chief executive of Aviva, said:

'Norwich Union Insurance is an efficient, high return business with significant scale advantages and strong management.
The combination of Norwich Union Insurance and RAC will be a powerful new force in the UK insurance and motoring 
services industry and has great potential to create significant value for our shareholders through bottom-line delivery
of earnings and cash generation. It enhances the strategic position of Norwich Union Insurance and accelerates its 
growth plans in a changing marketplace.' 

Patrick Snowball, chief executive of NUI and group executive director, Aviva, added: 

'This is a transformational acquisition for Norwich Union Insurance, which consolidates our position as the UK's 
leading general insurer and substantially advances our motoring services to customers. There is significant potential 
for growth from realising the full power of the exceptionally strong RAC brand, particularly in financial services. 

We also expect that membership of the Aviva Group will provide benefits and opportunities for employees across the 
Enlarged Aviva Group. We are excited about the revenue opportunities from this combination. When it comes to their 
car, we will help our customers learn how to drive it, buy it, insure it and, if things go wrong, get them back on the 
road fast.' 

Commenting on the Offer, Peter Smith, chairman of RAC, said: 

'The Board of RAC plc recommends unanimously this offer by Aviva to our shareholders.  This offer represents a 
significant premium to our recent share price reflecting the potential of the combined companies. This offer not only 
represents substantial value in terms of the cash element to our shareholders but also, through receiving Aviva shares,
it allows them to benefit from the future growth of the combined companies.'

This summary should be read in conjunction with the full text of the announcement. The sources and bases of information
 contained in this summary are set out in Appendix II to the full announcement and the definitions of certain 
expressions used in this summary are contained in Appendix III to the full announcement.

- ends -

Enquiries:

Aviva plc
Analysts and investors
Steve Riley, investor relations director                    [phone]

Media
Transaction Press Office                                    [phone]
Hayley Stimpson, director of external affairs               [phone]
Sue Winston, head of group media relations                  [phone]
Louise Zucchi, head of NUI media relations                  [phone]


Goldman Sachs International                                  [phone]
John Rafter
Andrew Dodd


JPMorgan Cazenove                                            [phone]
Tim Wise
Conor Hillery


Financial Dynamics                                           [phone]
Rob Bailhache
Nic Bennett


RAC plc
Analysts and investors
Niall Addison,                                               [phone]
Group Finance and Investor Relations Manager 

Media
Neil Lovell, Corporate Communications Director               [phone]
 

Lazard                                                       [phone]
Will Samuel
Paul Jameson
Samuel Bertrand


Hoare Govett                                                 [phone]
Bob Pringle
Caroline Griffiths


Brunswick                                                    [phone]
Anita Scott
Nigel Prideaux


Notes to editors:

'Aviva is the world's fifth-largest insurance group based on gross world-wide premiums and is the UK's largest insurer.

'Aviva's principal business activities are long-term savings, fund management and general insurance, with world-wide 
premium income and retail investment sales from continuing operations of £33 billion and assets under management of 
more than £273 billion.

'In 2004 Aviva's long-term savings, investment and health business premium income was £23 billion (70 per cent.) and 
general insurance premium income was £10 billion (30 per cent.).

'NUI is the largest general insurer in the UK and produces 60 per cent. of Aviva's worldwide general insurance business
by gross written premiums. NUI's overall market share in the UK is 14 per cent. and it insures one in five households,
one in seven motor vehicles and more than 800,000 businesses in the UK. 

'RAC has 2.2 million individual roadside members and a further 4.5 million corporate roadside customers through its 
corporate partnership relationships. RAC was voted the UK's number one roadside assistance provider by customers in the
JD Power 2004 UK roadside assistance study. It is a leading player in the motoring services market with an 
exceptionally strong brand - it achieves near 100 per cent. brand awareness in the UK. RAC's business is organised 
around four divisions: Consumer Services; Business Solutions; Lex Vehicle Leasing; and Manufacturer Support Services. 

NEWSWIRES:  There will be a conference call today for wire services at 8:15am (GMT) on [phone] Quote: 
Aviva, Richard Harvey.

PRESS: There will be a press conference today at 12.30pm (GMT) at Aviva, St Helen's, 1 Undershaft, London, EC3P 3DQ.  
Journalists wishing to attend should ring Anna Marsh, Financial Dynamics in advance on 020 7269 7229.

ANALYSTS:  A presentation to investors and analysts will take place at 9:30am (GMT) at St Helen's, 1 Undershaft, 
London, EC3P 3DQ. The investors and analysts presentation is being filmed for live webcast and can be viewed on the 
Aviva Group's website www.aviva.com or on www.cantos.com. In addition a replay will be available on these websites 
later today. There will also be a live teleconference link to the investor and analyst meeting on [phone].
A replay facility will be available for two weeks on [phone]. The pass code is 7125647# for the whole 
presentation including Question & Answer session or 3831407# for Question & Answer session only.

The presentation slides will be available on the Aviva Group's website, www.aviva.com/presentations from 9am (GMT).

The Aviva media centre at www.aviva.com/media includes images, company information and news release archive. High 
resolution images are also available for the media to view and download free of charge from www.vismedia.co.uk.

Photographs are available from the Aviva media centre at www.aviva.com/media.

Notes:

1. Based on a total of 118,807,243 RAC Shares in issue on 8 March 2005, being the last Business Day before this 
   announcement.

2. The expected cost savings have been calculated on the basis of the existing costs and operating structures of the 
   companies and by reference to current prices and the current regulatory environment. The statements of estimated 
   cost savings relate to future actions and circumstances which, by their nature, involve risks, uncertainties and 
   other factors.  As a result of this, the cost savings referred to may not be achieved, or those achieved could be 
   materially different from those estimated.  

3.  A statement that the Offer will be cash flow and earnings accretive in 2006 does not constitute a profit 
    forecast and should not be interpreted to mean that earnings for 2006 or any subsequent financial period would 
    necessarily be greater than those for any preceding financial period.  

4.  European Embedded Value (EEV) earnings per share is calculated by reference to Aviva's Group operating 
    profit before amortisation of goodwill and exceptional items, net of tax, minorities and preference dividends, on 
    a European Embedded Value basis.

5.  Modified statutory operating earnings per share is calculated by reference to Aviva Group's post tax operating 
    profit before amortisation of goodwill, amortisation of acquired additional value of in-force long-term business 
    and exceptional items attributable to equity shareholders.

6.  The return on capital is calculated as the after-tax return on opening equity capital, based on operating profits
    before amortisation of goodwill and exceptional items.

 
This announcement does not constitute an offer to sell or invitation to purchase any securities in any jurisdiction.

The release, publication or distribution of this announcement in certain jurisdictions may be restricted by law. The 
availability of the Offer, if made, to persons not resident in the United Kingdom may be affected by the laws of the 
relevant jurisdictions in which they are located. Persons who are not resident in the United Kingdom or who are subject
to other jurisdictions should inform themselves of, and observe, any applicable requirements.

The Offer is not being made, directly or indirectly, in, into or from, or by the use of mails or any means of 
instrumentality (including, without limitation, telephonically or electronically) of interstate or foreign commerce of,
or any facility of a national, state or other securities exchange of, nor will it be made in, into or from, the US, 
Australia, Canada or Japan. Accordingly, copies of this announcement and formal documentation relating to the Offer are
not being, and must not be, directly or indirectly, mailed or otherwise forwarded, distributed or sent in, into or from,
the US, Australia, Canada or Japan and the Offer will not be capable of acceptance by any such use, instrumentality or
facility within the US, Australia, Canada or Japan and persons receiving this announcement or any formal documentation
(including custodians, nominees and trustees) must not mail or otherwise forward, distribute or send it in, into or 
from, the US, Australia, Canada or Japan. Doing so may render invalid any purported acceptance of the Offer. All RAC 
Shareholders or other persons (including nominees, trustees or custodians) who would or otherwise intend to or may have
a contractual or legal obligation to forward this announcement or any formal documentation relating to the Offer to 
any jurisdiction outside the United Kingdom should refrain from doing so and seek appropriate professional advice 
before taking any such actions.  

This announcement is not an offer of securities for sale in the US and the New Aviva Shares have not been, and will not
be, registered under the US Securities Act or under the securities laws of any state, district or other jurisdiction 
of the US, Australia, Canada or Japan and no regulatory clearance in respect of the New Aviva Shares has been, or will 
be, applied for in any jurisdiction other than the UK.  Accordingly, unless an exemption under the US Securities Act or
other relevant securities laws is applicable, the New Aviva Shares are not being, and may not be, offered, sold, 
resold, delivered or distributed, directly or indirectly, in or into the US, Australia, Canada or Japan or to, or for 
the account or benefit of, any US person or any person resident in Australia, Canada or Japan.

Goldman Sachs International, which is regulated in the United Kingdom by the Financial Services Authority, is acting 
for Aviva and no one else in connection with the Offer and will not be responsible to anyone other than Aviva for 
providing the protections afforded to clients of Goldman Sachs International or for providing advice in relation to the
Offer, or any matter referred to herein.

JPMorgan Cazenove Limited, which is regulated in the United Kingdom by the Financial Services Authority, is acting for 
Aviva and no one else in connection with the Offer and will not be responsible to anyone other than Aviva for providing
the protections afforded to clients of JPMorgan Cazenove Limited or for providing advice in relation to the Offer, or
any matter referred to herein. 

Lazard & Co., Limited, which is regulated in the United Kingdom by the Financial Services Authority, is acting for RAC
and no one else in connection with the Offer and will not be responsible for anyone other than RAC for providing the
protections afforded to clients of Lazard & Co., Limited or for providing advice in relation to the Offer, or any matter
referred to herein.

Hoare Govett Limited, which is regulated in the United Kingdom by the Financial Services Authority, is acting for RAC 
and no one else in connection with the Offer and will not be responsible to anyone other than RAC for providing the 
protections afforded to clients of Hoare Govett Limited or for providing advice in relation to the Offer, or any matter
referred to herein.

This announcement contains certain forward-looking statements. Such forward-looking statements involve risks and 
uncertainties that could significantly affect expected results and are based on certain key assumptions. Many factors 
could cause actual results to differ materially from those projected or implied in any forward-looking statements. Due
to such uncertainties and risks, readers are cautioned not to place undue reliance on such forward-looking statements,
which speak only as of the date hereof. Aviva disclaims any obligation to update any forward-looking or other 
statements contained herein, except as required by applicable law.

Any person who, alone or acting together with any other person(s) pursuant to an agreement or understanding (whether 
formal or informal) to acquire or control securities of Aviva or RAC, owns or controls, or becomes the owner or 
controller, directly or indirectly, of one per cent. or more of any class of securities of Aviva or RAC is generally 
required under the provisions of Rule 8 of the City Code to notify a Regulatory Information Service (as specified in 
the Listing Rules) and the Panel by not later than 12.00 noon on the Business Day following the date of the transaction 
of every dealing in such securities during the period to the date on which the Offer becomes or is declared 
unconditional as to acceptances or lapses or is otherwise withdrawn. Dealings by Aviva or RAC or by their respective 
associates (within the definition set out in the City Code) in any class of securities of Aviva or RAC until the end 
of such period must also be disclosed. Please consult your financial adviser immediately if you believe this Rule may 
be applicable to you.
 
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN, INTO OR FROM THE UNITED STATES, AUSTRALIA, CANADA OR JAPAN

9 March 2005

Aviva plc

Recommended Cash and Share Offer for RAC plc


1.  Introduction

The boards of Aviva and RAC today announce the terms of a recommended cash and share offer, to be made by Goldman Sachs
and JPMorgan Cazenove on behalf of Aviva, to acquire the entire issued and to be issued share capital of RAC. The Offer
is unanimously recommended by the board of RAC.

The Offer will be 0.7154 New Aviva Shares and 462.5p in cash for every 1 RAC Share, valuing each RAC Share at 
approximately 925p and RAC's existing issued share capital at approximately £1.1 billion based on the Closing Price of
an Aviva Share on 8 March 2005, being the last Business Day before this announcement (after taking account of Aviva's 
proposed final dividend of 16p per share for the year ended 31 December 2004, to which RAC Shareholders will not be 
entitled). (1)

Irrevocable undertakings to accept the Offer have been received from the directors of RAC who hold RAC Shares, 
representing approximately 0.2 per cent. of RAC's existing issued share capital.


2.The Offer

Under the terms of the Offer, RAC Shareholders will be entitled to receive: 

for every 1 RAC Share        0.7154 New Aviva Shares 
                                        and
                                 462.5p in cash 

and so in proportion for any other number of RAC Shares held.

A Mix and Match Facility will be available to RAC Shareholders, further details of which are set out in paragraph 10 
below.

Based on the Closing Price of an Aviva Share on 8 March 2005, being the last Business Day before this announcement, 
the Offer values each RAC Share at approximately 925p and the existing issued share capital of RAC at approximately 
£1.1 billion (after taking account of Aviva's proposed final dividend of 16p per share for the year ended 31 December 
2004 to which RAC Shareholders will not be entitled). (1)

In addition, RAC Shareholders will retain the right to receive the proposed RAC final dividend of 15.6p per share for 
the year ended 31 December 2004 which is expected to be paid on 5 May 2005. 

Including the proposed RAC final dividend payable to RAC Shareholders, the value of the Offer represents a premium of 
approximately 27 per cent. over the Closing Price of a RAC Share of 742p on 7 March 2005, the last Business Day before 
the announcement by RAC that it had received an approach. The value of the Offer also represents a premium of 
approximately 34 per cent. over the average Closing Price of a RAC Share of 703p for the month before the announcement 
by RAC that it had received an approach. 

Full acceptance of the Offer (assuming full exercise of options under the RAC Share Option Schemes where the exercise 
price is less than the value of the Offer on the basis set out in paragraph 1 above) will involve the issue of up to 
88.6 million New Aviva Shares (representing approximately 3.7 per cent. of the enlarged issued share capital of the 
Enlarged Aviva Group).  

As fractions of New Aviva Shares will not be allotted or issued to persons accepting the Offer, fractional entitlements
to New Aviva Shares will be aggregated and sold in the market and the net proceeds of sale will be distributed pro 
rata to persons entitled thereto. However, individual entitlements to amounts of less than £3 will not be paid to 
persons accepting the Offer but will be retained for the benefit of the Enlarged Aviva Group.

The Offer will be for all the issued and to be issued RAC Shares (other than any RAC Shares already owned by a member 
of the Aviva Group). The RAC Shares are to be acquired by or on behalf of Aviva under the Offer fully paid and free 
from all liens, charges, equitable interests, encumbrances, rights of pre-emption and other third party rights and 
interests and together with all rights attaching thereto, including voting rights and the right to receive and retain 
all dividends and other distributions declared, made or paid after this announcement, save for the proposed RAC final 
dividend of 15.6p per share for the year ended 31 December 2004 proposed to be paid on 5 May 2005.

The Offer will be subject to the conditions and certain further terms set out in this paragraph, paragraph 10 below 
and in Appendix I to this announcement and the further terms and conditions to be contained in the formal Offer 
Document and the related Form of Acceptance.


3.Background to and reasons for the Offer

The board of Aviva believes that the Acquisition will create significant value for its shareholders by delivering a 
powerful new combination in insurance and motoring services, which will consolidate NUI's position in UK general 
insurance and provide the opportunity to realise the full potential of the RAC brand.

The Acquisition is consistent with Aviva's strategy of growing its long-term savings business whilst maintaining a 
focused approach to general insurance as well as reinforcing the balance of the Aviva Group's earnings from life and 
non-life insurance activities. 

The Acquisition is expected to generate significant cost savings and is expected to be cash flow and earnings enhancing
 (on a modified statutory operating earnings per share basis and on an EEV operating earnings per share basis) for 
Aviva in 2006 and beyond. (2) (3) (4) (5)


Market developments in general insurance

The Acquisition is being made against a background of significant change in the UK general insurance market in recent 
years. Customer demands have evolved with the expectation of increased service levels and broader product offerings from
 insurance providers. Low cost and convenience are paramount and there is a growing propensity to purchase from trusted 
brands. Customer loyalty and retention have therefore become increasingly important to long-term profitability. 

At the same time, the influence of traditional methods of distribution has declined. Telephone and internet 
distribution channels now dominate and large retailers and brands, with low costs of customer acquisition, have emerged
 as powerful distributors. 


NUI at the forefront of market change

Recognising changes in customer behaviour and the resulting shift in distribution, NUI has sought to lead the 
development of the industry and has been implementing a number of changes over the last few years. These changes have 
positioned NUI well in a market where customers now buy a broader range of motor-related products from trusted brands 
and where low cost and convenience have become paramount, playing to the strengths of providers with direct 
distribution and well-recognised brands.

Firstly, in response to these market developments, NUI has closed its broker, Hill House Hammond, and is on target to 
transfer 500,000 policyholders successfully into its NUI Direct brand (a lower cost, higher value channel) contributing 
to the growth of 22 per cent. in its NUI Direct business in 2004.

Secondly, within the UK personal lines market, NUI has been implementing a strategy to develop new revenue streams, 
increase customer retention and enhance the performance of its core insurance business. This has been particularly 
evident in motor insurance, which is the largest area of the personal lines general insurance market, where NUI is 
positioning itself as a motoring services provider by broadening its product base. Initiatives include: 

-   the launch of NUI Rescue, with customer numbers reaching approximately 275,000 within two years. RAC is 
    NUI's supplier for this service; 

-   the development of a number of ground breaking products such as Pay As You DriveTM insurance, which uses 
    patented black box technology to price the insurance risk according to actual driving experience. This has achieved
    strong success in the pilot to date and NUI has recently launched its first policy on this basis where young 
    drivers can receive lower premiums by selecting where, when and how often they drive their car; and

-   in August 2004 NUI acquired HPI Holdings Limited, the UK's leading independent provider of vehicle information and 
    checking services. 

Thirdly, NUI has enhanced its efficiency by leveraging its scale to take advantage of its position as a bulk purchaser 
of claims related goods and materials to deliver strong supply chain savings, while also investing in offshoring and 
process improvements to deliver savings across the business. Reflecting this strategy, the combined operating ratio, a 
key industry measure of efficiency and performance, has decreased from 101 per cent. in 2002 to 97 per cent. in 2004.


Benefits of combining NUI and RAC

The Acquisition creates a powerful new combination in insurance and motoring services in the UK.  RAC has 2.2 million 
individual roadside members and a further 4.5 million corporate roadside customers through its corporate partnership 
relationships. RAC was voted the UK's number one roadside assistance provider by customers in the JD Power 2004 UK 
roadside assistance study. It is a leading player in the motoring services market with an exceptionally strong brand, 
achieving almost 100 per cent. brand awareness in the UK. RAC's Consumer Services business, which represents 
approximately 54 per cent. of profits, includes roadside recovery and has a range of individual motoring solutions 
including driver tuition through BSM, car financing, insurance, legal services, automotive glass and traffic and travel
information.  

RAC is already one of NUI's largest suppliers. It has provided the motor claims notification customer helpline, 
roadside recovery and a roadside assistance service offered as an addition to NUI motor insurance policies for ten 
years. RAC has provided underwriting of NUI's motor legal expenses cover and operated its motor legal expenses claims 
handling service for seven years. For the last two years it has provided services to NUI's own branded roadside 
assistance product.

The combination brings together RAC's powerful UK brand, customer base of more than 6 million and a leading motoring 
services business with NUI's complementary expertise in insurance.  It will create a leading provider of motor 
insurance and motoring services in the UK. In particular, the combination:

-   accelerates NUI's strategic objective to capitalise on changes in the market place and capture higher value 
    business by moving closer to customers and offering a broader range of products and services;

-   provides access to RAC's 2.2 million individual roadside members;

-   enhances NUI's partnership business by bringing new distribution partners, with an additional 4.5 million corporate
    roadside customers, and the potential to develop RAC's current partnership relationships with the broader range of
    products and services;

-   delivers a route to realise the potential of the RAC brand in insurance and financial services - areas where RAC 
    already has ambitious plans for expansion;

-   is expected to create total pre-tax cost savings across the combined businesses of at least £80 million per annum 
    to be achieved in 2006; (2) and

-   is expected to be cash flow and earnings enhancing (on a modified statutory operating earnings per share basis and 
    on an EEV operating earnings per share basis) for Aviva in 2006, being the first full year following completion of
    the Acquisition, and beyond. (3) (4) (5) 


Synergies (2)

The combination of NUI and RAC is expected to generate substantial synergies, both in terms of additional revenue 
benefits and cost savings. In 2006, total pre-tax cost savings across the combined businesses are expected to be at 
least £80 million per annum. (2)

Revenue Benefits
NUI and RAC contribute complementary strengths in different product areas. The management of both NUI and RAC have 
identified significant opportunities to increase sales to the combined customer base, thereby accelerating the growth 
of the combined business.

The board of Aviva has identified potential revenue opportunities that it believes will have a significant impact on 
the operating margin and profit of the combined organisation. Revenue benefits are expected to be derived principally 
from:

-   RAC direct insurance - the board of Aviva believes that improved customer penetration can be achieved by combining
    RAC's strong brand and large customer base with NUI's insurance expertise, which in turn will lead to additional 
    profits. The RAC insurance brand is perceived as not having reached its full potential. In a recent survey by ICM, 
    when prompted approximately 20 per cent. of those asked said they would buy motor insurance from RAC. However, 
    against this backdrop, only 13 per cent. of RAC's individual roadside members have purchased more than one RAC 
    product. 

The board of Aviva is excited by the opportunity the RAC insurance proposition provides and believes NUI can grow the 
insurance customer base by approximately 300,000 customers by the end of 2007.  NUI has a proven track record of 
growing its own direct insurance business, which grew by 22 per cent. in 2004 and successfully developing its corporate
partnerships; and

-   Grow rescue products and risk pricing - it is NUI's aim to increase RAC's roadside assistance customer base 
    from 6.7 million customers to 7.3 million by the end of 2007. The targeted sales of rescue products to NUI's 
    existing  customer base together with the application of NUI's  risk pricing methodology (which applies insurance 
    underwriting techniques) to roadside products is expected to result in increased volumes and profit margin. This
    risk based pricing methodology has already been used successfully by NUI in developing its own breakdown service 
    and, within two years, NUI has acquired approximately 275,000 breakdown customers. 

The combination of RAC and NUI offers compelling opportunities to offer an expanded range of motoring and financial 
services products across the combined customer base using the most effective brand in each case.

Cost Savings

In addition, NUI believes the combined businesses have the potential to realise significant cost savings.  It is 
expected that the identified potential pre-tax cost savings across the combined businesses will total at least £80 
million per annum to be achieved in 2006. These estimated cost savings will be achieved from a combined NUI and RAC 
cost base of approximately £2.1 billion.(2)

Savings across the combined businesses are expected to result from the removal of duplicated head office costs, a 
reduction in external advice costs, marketing economies, call centre efficiencies and a reduction in support staff 
including IT, HR and Finance. In addition, there are expected to be supply chain savings, as similar products are 
purchased across the two businesses.(2) In this area NUI has a proven track record, achieving an increase in supply 
chain savings of £55 million during 2004 in addition to £175 million cumulative supply chain benefits achieved in 2003.

RAC currently has an IT support offshoring pilot which NUI intends to extend to include the offshoring of certain back 
office administration functions. Other identified cost savings include those expected to result from property disposals
and further operational efficiencies.

Savings will be achieved with regard to maintaining the strong customer service standards of NUI and RAC, consistent 
with their trusted retail brands.

Restructuring costs of approximately £100 million pre-tax are estimated to be incurred integrating the two businesses. 


4.Integration plan for the combination of NUI and RAC

The Acquisition will involve a comprehensive integration of RAC and NUI to ensure that RAC customers gain the full 
benefit of being part of the Enlarged Aviva Group and that the maximum level of synergies is achieved. The phasing of 
the integration will be structured so as to minimise any disruption to customers during the integration process. 

The RAC, BSM and Lex brands will be maintained and actively promoted alongside NUI. 


Management and employees

On the Offer becoming or being declared unconditional in all respects, the accrued employment rights, including pension
rights, of all management and employees of the RAC Group will be protected.

The total number of staff employed by NUI and RAC will be approximately 24,000. The board of Aviva believes that 
membership of the Enlarged Aviva Group will provide opportunities for employees across the enlarged group. It is, 
however, expected that approximately 1,700 UK roles will be affected as a result of the integration of the two 
businesses. Of these, approximately 900 roles will be lost through combining support functions. Following the success 
of NUI's offshoring operations, it is expected that RAC's offshore operations will be expanded and approximately 800 
back office and administration roles will be offshored. It is not intended to move any customer facing front office 
operations offshore. 

Wherever possible reductions in staff numbers will be achieved through natural staff turnover and redeployment, 
although some compulsory redundancies are likely.  However, NUI has staff turnover in a typical year in excess of 
these numbers.  Additionally, as a result of the proposed growth plans the board of Aviva expects to create significant
numbers of new roles over the next three years in the combined organisation. The board of Aviva believes these changes
will assist in minimising the impact of these reductions. Employee representatives and employees will be consulted 
throughout this process.


5.Benefits for RAC customers

The coming together of two powerful and trusted brands will ensure that customers benefit from a greatly enhanced range
of products, particularly in the motoring services market. The board of Aviva believes that the increased scale and 
buying power of NUI and RAC will enhance customer service and value for money, both of which are key requirements for 
customers wishing to purchase insurance and motoring service products in today's marketplace.


6.Financial effects on Aviva (3)

The Acquisition is expected to be cash flow and earnings enhancing (on a modified statutory operating earnings per 
share basis and on an EEV operating earnings per share basis) for Aviva in 2006, being the first full year following 
completion of the Acquisition. It will also enhance the Aviva Group's return on capital employed from 2006. (3) (4) (5)
(6)

The Acquisition is expected to enhance the quality of the Aviva Group's earnings, increasing the important cash-based 
earnings contribution to the Aviva Group from the non-life insurance business. (3) 

The increase in cash flow to the Aviva Group will be available for investment in growth in the life businesses, 
investment in NUI and RAC and will enhance Aviva Group's dividend cover.

The Aviva Group's proforma EU Insurance Groups Directive solvency excess remains strong at approximately £3 billion as 
at 31 December 2004, after the estimated £0.6 billion impact of goodwill and equity issuance relating to the 
Acquisition.


7.Information on Aviva

Aviva is the world's fifth-largest insurance group and the biggest in the UK. It is one of the leading providers of 
life and pensions products to Europe and has substantial businesses elsewhere around the world. Its main activities are
long-term savings, general insurance and fund management. It has premium income and investment sales from continuing 
operations of approximately £33 billion and over £273 billion of assets under management as at 31 December 2004. The 
Aviva Group has approximately 49,000 employees serving 30 million customers worldwide.

Aviva's strategy is to be a leading European-based financial services group with a focus on long-term savings as 
Aviva's engine of growth; to take a focused approach to general insurance, with disciplined underwriting and efficient 
claims handling; to build a world-class fund management business; to build top-five positions in key markets; and to 
withdraw from lines of business or markets that do not offer the potential for market-leading positions or superior 
returns.


8.Information on NUI

NUI is the largest general insurer in the UK and produces 60 per cent. of Aviva's general insurance business by gross 
written premiums. NUI's overall market share in the UK is 14 per cent. and it insures one in five households, one in 
seven motor vehicles and more than 800,000 businesses in the UK. 

NUI's core business priorities are rigorous cost control, disciplined underwriting and excellent customer service. 
NUI's stated strategy is to deliver high-quality earnings from market-leading positions in personal insurance and 
selected commercial lines. NUI's range of distribution channels and balanced portfolio of products and services enables
NUI to react flexibly to changing market conditions and to meet customer needs. 

NUI in recent years has invested in the development of innovative, tailored propositions such as digital flood mapping,
Pay As You DriveTM insurance and NUI Rescue vehicle breakdown service, which has seen rapid growth. NUI continues to 
use its scale, market influence and expertise to drive cost efficiency to the benefit of shareholders and customers.

NUI's premium income in 2004 was £5.4 billion, with operating profits before tax, amortisation of goodwill and 
exceptional items of £832 million and a combined operating ratio of 97 per cent.


9.Information on RAC

RAC has 2.2 million individual roadside members and a further 4.5 million corporate roadside customers through its 
corporate partnership relationships. RAC was voted the UK's number one roadside assistance provider by customers in the
JD Power 2004 UK roadside assistance study. It is a leading player in the motoring services market with an 
exceptionally strong brand - it achieves near 100 per cent. brand awareness in the UK.  RAC's business is organised 
around four divisions - Consumer Services; Business Solutions; Lex Vehicle Leasing; and Manufacturer Support Services. 

The Consumer Services division represents approximately 54 per cent. of RAC's profits and has established itself as the
provider of a comprehensive range of individual motoring solutions including driver tuition through BSM, car financing,
insurance, legal services, automotive glass and traffic and travel information.  RAC believes that this range of
solutions adds value and depth to its relationships with customers and enables it to create long term partnerships 
with their 2.2 million individual roadside members.

The Business Solutions division includes claims management and accident services, vehicle inspections and customer 
contact centres. 

Lex Vehicle Leasing provides vehicle leasing, supply, management, maintenance and incident support for companies who 
outsource the day to day operation of their fleets.

Manufacturer Support Services provides a broad range of warehousing, logistics and parts supply solutions to help 
businesses and the public sector maximise their operating efficiency. In addition, the division provides vehicle 
marketing and distribution for Hyundai in the UK.


10.Mix and Match Facility

RAC Shareholders may elect under the terms of the Offer, subject to availability, to vary the proportions in which they
receive New Aviva Shares and cash in respect of their holdings of RAC Shares.  However, the total number of New Aviva 
Shares to be issued and the maximum aggregate amount of cash to be paid under the Offer will not be varied as a result 
of elections under the Mix and Match Facility.  Accordingly, satisfaction of elections made by RAC Shareholders under 
the Mix and Match Facility will depend on the extent to which other RAC Shareholders make offsetting elections.  
Satisfaction of elections under the Mix and Match Facility will be effected on the basis of 646.5 pence in cash 
(being the Closing Price of an Aviva Share on 8 March 2005, the last Business Day before this announcement, after 
taking account of Aviva's proposed final dividend of 16p per share for the year ended 31 December 2004, to which RAC 
Shareholders will not be entitled) for each New Aviva Share (and vice versa).  To the extent that elections cannot be 
satisfied in full, they will be scaled down on a pro rata basis.  As a result, RAC Shareholders who make an election 
under the Mix and Match Facility will not necessarily know the exact number of New Aviva Shares or the amount of cash 
they will receive until settlement of the consideration under the Offer.  

Elections under the Mix and Match Facility will not affect the entitlements of those RAC Shareholders who do not make 
any such elections.  

The Mix and Match Facility will remain open until the first closing date of the Offer (and Aviva may close it on that 
or any subsequent closing date). If the Offer is not then unconditional as to acceptances in accordance with paragraph 
(a) of Appendix I to this announcement, Aviva may extend the Mix and Match Facility to a later date.  If the Mix and 
Match Facility has been closed, then Aviva reserves the right to reintroduce a Mix and Match Facility, subject to the
rules of the City Code.  The Mix and Match Facility is conditional on the Offer becoming or being declared 
unconditional in all respects.

Further details on the Mix and Match Facility will be included in the formal Offer Document and the related Form of 
Acceptance.


11. Financing

The Offer includes (assuming full exercise of options, but without taking account of the exercise proceeds of those 
options, under the RAC Share Option Schemes where the exercise price is less than the value of the Offer on the basis 
set out in paragraph 1 above) approximately £572 million of cash consideration which will be financed from the Aviva 
Group's current resources. 


12. The New Aviva Shares

The New Aviva Shares to be issued pursuant to the Offer will be issued credited as fully paid and will rank pari passu 
in all respects with the existing Aviva Shares.  The RAC Shareholders will not be entitled to Aviva's proposed final 
dividend of 16p per share for the year ended 31 December 2004.


13. RAC Share Option Schemes

The Offer will extend to RAC Shares issued or unconditionally allotted upon the exercise of options under the RAC Share
Option Schemes whilst the Offer remains open for acceptance or by such earlier date as Aviva may decide, not being 
earlier than the date on which the Offer becomes unconditional as to acceptances, or if later, the first closing date 
of the Offer.

To the extent that such options are not exercised, appropriate proposals will be made in due course to participants in
the RAC Share Option Schemes to take effect once the Offer becomes, or is, declared unconditional in all respects.


14. Disclosure of interests in RAC

Save for 1,114,000 RAC Shares owned or controlled by Aviva, its subsidiaries or their respective pension funds in the 
course of insurance, fund management or pension fund operations and 625 RAC Shares owned by the spouse of a director of
Aviva, as at the close of business on 8 March 2005, being the latest practicable day prior to the date of this 
announcement, neither Aviva, nor any of the directors of Aviva nor their close relatives and related trusts, nor, so 
far as Aviva is aware, any party acting in concert with Aviva, owned or controlled any RAC Shares or held any options 
to purchase any RAC Shares, or had any arrangements in relation to any RAC Shares, or had entered into any derivative 
referenced to RAC Shares which remained outstanding. Arrangements include an indemnity or option arrangement or an 
agreement or understanding, whether formal or informal, of whatever nature relating to RAC Shares which is or may be an 
inducement to one or more persons to deal or refrain from dealing in such shares. 


15. Settlement, listing and dealing

Application will be made to the London Stock Exchange for the New Aviva Shares to be admitted to trading on its market 
for listed securities and to the UK Listing Authority for the New Aviva Shares to be admitted to the Official List. It 
is expected that listing will become effective and that dealings will commence on the first Business Day following the 
date on which the Offer becomes or is declared unconditional in all respects (subject only to the condition relating to
Admission set out in paragraph (c) of Appendix I to this announcement).

Certificates for New Aviva Shares to be issued to RAC Shareholders will be despatched no later than 14 days after the 
date on which the Offer becomes or is declared unconditional in all respects. No certificates for New Aviva Shares will
be issued in respect of the entitlements of those RAC Shareholders who hold their shares in CREST, settlement for 
which will be made through the applicable CREST procedures.

Further details on listing, dealing and settlement will be included in the formal Offer Document.


16. Delisting, cancellation of trading and compulsory acquisition

If sufficient acceptances are received, Aviva intends to exercise its rights pursuant to the provisions of section 428 
to 430F (inclusive) of the Companies Act to acquire compulsorily any outstanding RAC Shares to which the Offer relates
and to apply in due course to delist the RAC Shares from the Official List and to cancel trading on the London Stock 
Exchange's market for listed securities.


17. Irrevocable undertakings

Irrevocable undertakings to accept the Offer have been received from the directors of RAC who hold RAC Shares in 
respect of 239,991 RAC Shares, representing approximately 0.2 per cent. of RAC's existing issued share capital in 
aggregate.

The irrevocable undertakings will only cease to be binding in the event that a competing offer becomes wholly 
unconditional.



18. The recommendation

The directors of RAC, who have been so advised by Lazard, consider the terms of the Offer to be fair and reasonable, 
so far as RAC Shareholders taken as a whole are concerned. In providing its advice to the directors of RAC, Lazard has 
taken into account the commercial assessments of the directors of RAC. Accordingly, the directors of RAC unanimously 
recommend RAC Shareholders to accept the Offer, as they have irrevocably undertaken to do in respect of their own 
beneficial holdings, amounting, in aggregate, to 239,991 RAC Shares, representing approximately 0.2 per cent. of RAC's
existing issued share capital.


19. Expected timetable

The Offer Document, containing the full terms and conditions of the Offer, will be despatched to RAC Shareholders 
within 28 days of this announcement unless agreed otherwise by the Panel.


20. General

In accordance with Rule 2.10 of the City Code, as at 8 March 2005 (being the last Business Day before this 
announcement), 118,807,243 RAC Shares were in issue. The International Securities Identification Number for RAC Shares 
is GB0005145239. In addition, as at 8 March 2005 (being the last Business Day before this announcement), 2,282,763,711
Aviva Shares were in issue. The International Securities Identification Number for Aviva Shares is GB0002162385.


The sources and bases of information contained in this announcement are contained in Appendix II. The definitions of 
certain expressions used in this announcement are contained in Appendix III.


- ends -


Enquiries:

Aviva plc
Analysts and investors
Steve Riley, investor relations director                     [phone]

Media
Transaction Press Office                                     [phone]
Hayley Stimpson, director of external affairs                [phone]
Sue Winston, head of group media relations                   [phone]
Louise Zucchi, head of NUI media relations                   [phone]

Goldman Sachs International                                  [phone]
John Rafter
Andrew Dodd


JPMorgan Cazenove                                            [phone]
Tim Wise
Conor Hillery


Financial Dynamics                                           [phone]
Rob Bailhache
Nic Bennett
 

RAC plc
Analysts and investors
Niall Addison,                                               [phone]
Group Finance and Investor Relations Manager 

Media
Neil Lovell, Corporate Communications Director               [phone]
 

Lazard                                                       [phone]
Will Samuel
Paul Jameson
Samuel Bertrand


Hoare Govett                                                 [phone]
Bob Pringle
Caroline Griffiths


Brunswick                                                    [phone]
Anita Scott
Nigel Prideaux


Notes to editors:

-   Aviva is the world's fifth-largest insurance group based on gross world-wide premiums and is the UK's largest
 insurer.

-   Aviva's principal business activities are long-term savings, fund management and general insurance, with 
world-wide premium income and retail investment sales from continuing operations of £33 billion and assets under 
management of more than £273 billion.

-   In 2004 Aviva's long-term savings, investment and health business premium income was £23 billion (70 per cent.) 
and general insurance premium income was £10 billion (30 per cent.).

-   NUI is the largest general insurer in the UK and produces 60 per cent. of Aviva's worldwide general insurance
business by gross written premiums. NUI's overall market share in the UK is 14 per cent. and it insures one in five 
households, one in seven motor vehicles and more than 800,000 businesses in the UK. 

-   RAC has 2.2 million individual roadside members and a further 4.5 million corporate roadside customers through its 
corporate partnership relationships. RAC was voted the UK's number one roadside assistance provider by customers in 
the JD Power 2004 UK roadside assistance study. It is a leading player in the motoring services market with an 
exceptionally strong brand - it achieves near 100 per cent. brand awareness in the UK.  RAC's business is organised 
around four divisions: Consumer Services; Business Solutions; Lex Vehicle Leasing; and Manufacturer Support Services. 


NEWSWIRES:  There will be a conference call today for wire services at 8:15am (GMT) on [phone] Quote: 
Aviva, Richard Harvey.

PRESS: There will be a press conference today at 12.30pm (GMT) at Aviva, St Helen's, 1 Undershaft, London, EC3P 3DQ.  
Journalists wishing to attend should ring Anna Marsh, Financial Dynamics in advance on 020 7269 7229.

ANALYSTS:  A presentation to investors and analysts will take place at 9:30am (GMT) at St Helen's, 1 Undershaft, 
London, EC3P 3DQ. The investors and analysts presentation is being filmed for live webcast and can be viewed on the 
Aviva Group's website www.aviva.com or on www.cantos.com. In addition a replay will be available on these websites 
later today. There will also be a live teleconference link to the investor and analyst meeting on [phone].
 A replay facility will be available for two weeks on [phone]. The pass code is 7125647# for the whole 
presentation including Question & Answer session or 3831407# for Question & Answer session only.

The presentation slides will be available on the Aviva Group's website, www.aviva.com/presentations from 9am (GMT).

The Aviva media centre at www.aviva.com/media includes images, company information and news release archive. High 
resolution images are also available for the media to view and download free of charge from www.vismedia.co.uk.

Photographs are available from the Aviva media centre at www.aviva.com/media.


Notes: 

1.  Based on a total of 118,807,243  RAC Shares in issue on 8 March 2005, being the last Business Day before this 
    announcement.

2.  The expected cost savings have been calculated on the basis of the existing costs and operating structures 
    of the companies and by reference to current prices and the current regulatory environment. The statements of 
    estimated cost savings relate to future actions and circumstances which, by their nature, involve risks, 
    uncertainties and other factors.  As a result of this, the cost savings referred to may not be achieved, or those 
    achieved could be materially different from those estimated.  

3.  A statement that the Offer will be cash flow and earnings accretive in 2006 does not constitute a profit 
    forecast and should not be interpreted to mean that earnings for 2006 or any subsequent financial period would 
    necessarily be greater than those for any preceding financial period.  

4.  European Embedded Value (EEV) earnings per share is calculated by reference to Aviva's Group operating 
    profit before amortisation of goodwill and exceptional items, net of tax, minorities and preference dividends, on a
    European Embedded Value basis.

5.  Modified statutory operating earnings per share is calculated by reference to Aviva Group's post tax 
    operating profit before amortisation of goodwill, amortisation of acquired additional value of in-force long-term 
    business and exceptional items attributable to equity shareholders.

6.  The return on capital is calculated as the after-tax return on opening equity capital, based on operating 
    profits before amortisation of goodwill and exceptional items.


This announcement does not constitute an offer to sell or invitation to purchase any securities in any jurisdiction.

The release, publication or distribution of this announcement in certain jurisdictions may be restricted by law. The 
availability of the Offer, if made, to persons not resident in the United Kingdom may be affected by the laws of the 
relevant jurisdictions in which they are located. Persons who are not resident in the United Kingdom or who are subject
to other jurisdictions should inform themselves of, and observe, any applicable requirements.

The Offer is not being made, directly or indirectly, in, into or from, or by the use of mails or any means of 
instrumentality (including, without limitation, telephonically or electronically) of interstate or foreign commerce of,
or any facility of a national, state or other securities exchange of, nor will it be made in, into or from, the US, 
Australia, Canada or Japan. Accordingly, copies of this announcement and formal documentation relating to the Offer are
not being, and must not be, directly or indirectly, mailed or otherwise forwarded, distributed or sent in, into or 
from, the US,  Australia, Canada or Japan and the Offer will not be capable of acceptance by any such use, 
instrumentality or facility within the US, Australia, Canada or Japan and persons receiving this announcement or any 
formal documentation (including custodians, nominees and trustees) must not mail or otherwise forward, distribute or 
send it in, into or from, the US, Australia, Canada or Japan. Doing so may render invalid any purported acceptance of 
the Offer. All RAC Shareholders or other persons (including nominees, trustees or custodians) who would or otherwise 
intend to or may have a contractual or legal obligation to forward this announcement or any formal documentation 
relating to the Offer to any jurisdiction outside the United Kingdom should refrain from doing so and seek appropriate
professional advice before taking any such actions.  

This announcement is not an offer of securities for sale in the US and the New Aviva Shares have not been, and will not
be, registered under the US Securities Act or under the securities laws of any state, district or other jurisdiction of
the US, Australia, Canada or Japan and no regulatory clearance in respect of the New Aviva Shares has been, or will be, 
applied for in any jurisdiction other than the UK.  Accordingly, unless an exemption under the US Securities Act or 
other relevant securities laws is applicable, the New Aviva Shares are not being, and may not be, offered, sold, resold,
delivered or distributed, directly or indirectly, in or into the US, Australia, Canada or Japan or to, or for the 
account or benefit of, any US person or any person resident in Australia, Canada or Japan.

Goldman Sachs International, which is regulated in the United Kingdom by the Financial Services Authority, is acting 
for Aviva and no one else in connection with the Offer and will not be responsible to anyone other than Aviva for 
providing the protections afforded to clients of Goldman Sachs International or for providing advice in relation to 
the Offer, or any matter referred to herein.

JPMorgan Cazenove Limited, which is regulated in the United Kingdom by the Financial Services Authority, is acting for
Aviva and no one else in connection with the Offer and will not be responsible to anyone other than Aviva for 
providing the protections afforded to clients of JPMorgan Cazenove Limited or for providing advice in relation to the 
Offer, or any matter referred to herein. 

Lazard & Co., Limited, which is regulated in the United Kingdom by the Financial Services Authority, is acting for RAC
and no one else in connection with the Offer and will not be responsible for anyone other than RAC for providing the
protections afforded to clients of Lazard & Co., Limited or for providing advice in relation to the Offer, or any
matter referred to herein.

Hoare Govett Limited, which is regulated in the United Kingdom by the Financial Services Authority, is acting for RAC 
and no one else in connection with the Offer and will not be responsible to anyone other than RAC for providing the 
protections afforded to clients of Hoare Govett Limited or for providing advice in relation to the Offer, or any matter
referred to herein.

This announcement contains certain forward-looking statements. Such forward-looking statements involve risks and 
uncertainties that could significantly affect expected results and are based on certain key assumptions. Many factors 
could cause actual results to differ materially from those projected or implied in any forward-looking statements. Due
to such uncertainties and risks, readers are cautioned not to place undue reliance on such forward-looking statements,
which speak only as of the date hereof. Aviva disclaims any obligation to update any forward-looking or other 
statements contained herein, except as required by applicable law.

Any person who, alone or acting together with any other person(s) pursuant to an agreement or understanding (whether 
formal or informal) to acquire or control securities of Aviva or RAC, owns or controls, or becomes the owner or 
controller, directly or indirectly, of one per cent. or more of any class of securities of Aviva or RAC is generally 
required under the provisions of Rule 8 of the City Code to notify a Regulatory Information Service (as specified in 
the Listing Rules) and the Panel by not later than 12.00 noon on the Business Day following the date of the transaction
of every dealing in such securities during the period to the date on which the Offer becomes or is declared 
unconditional as to acceptances or lapses or is otherwise withdrawn. Dealings by Aviva or RAC or by their respective 
associates (within the definition set out in the City Code) in any class of securities of Aviva or RAC until the end 
of such period must also be disclosed. Please consult your financial adviser immediately if you believe this Rule may
be applicable to you.

 
APPENDIX I

Conditions and certain further terms of the Offer

The Offer, which will be made by Goldman Sachs and JPMorgan Cazenove on behalf of Aviva, will comply with the 
applicable rules and regulations of the UK Listing Authority and the London Stock Exchange and the City Code.

Part A: Conditions of the Offer

The Offer will be subject to the following conditions:

(a)valid acceptances being received (and not, where permitted, withdrawn) by not later than 3.00 p.m. on the 
first closing date of the Offer (or such later time(s) and/or date(s) as Aviva may, with the consent of the Panel or in
accordance with the City Code, decide) in respect of not less than 90 per cent. (or such lower percentage as Aviva 
may decide) in nominal value of the RAC Shares to which the Offer relates, provided that this condition (a) shall not 
be satisfied unless Aviva and/or any of its wholly-owned subsidiaries shall have acquired or agreed to acquire, whether
pursuant to the Offer or otherwise, RAC Shares carrying in aggregate more than 50 per cent. of the voting rights then
normally exercisable at general meetings of RAC.  For the purposes of this condition (a):

(i)RAC Shares which have been unconditionally allotted but not issued before the Offer becomes or is declared 
unconditional as to acceptances, whether pursuant to the exercise of any outstanding subscription or conversion rights 
or otherwise, shall be deemed to carry the voting rights they will carry on being entered into the register of members 
of RAC; and

(ii)the expression RAC Shares to which the Offer relates shall be construed in accordance with sections 428 to 
430F of the Companies Act; 

(b)in the event that the Acquisition constitutes a concentration with a Community dimension within the scope 
of Council Regulation (EC) 139/2004 (the Regulation):

(i)the European Commission having confirmed, in terms satisfactory to Aviva, that it does not intend to 
initiate proceedings under Article 6(1)(c) of the Regulation in respect of the Acquisition or any aspect of the 
Acquisition;

(ii)in the event that a request under Article 9(2) of the Regulation has been made by a European Union or EFTA 
state, either:

(I)the European Commission having confirmed, in terms satisfactory to Aviva, that it does not intend to refer 
the Acquisition or any aspect of the Acquisition to the competent authorities of such a European Union or EFTA state 
in accordance with Article 9(3) of the Regulation; or

(II)in the event the European Commission, in accordance with Article 9(3) of the Regulation, refers the 
Acquisition or any aspect of the Acquisition to the competent authorities of such a European Union or EFTA state, 
that competent authority indicating, in terms satisfactory to Aviva, that it does not intend to initiate second phase
proceedings (as provided for under the national laws of the relevant European Union or EFTA state) in respect of the 
Acquisition or any aspect of the Acquisition; and

(iii)no indication having been made that a European Union or EFTA state may take appropriate measures to protect 
legitimate interests pursuant to Article 21(3) of the Regulation in relation to the Acquisition or any aspect of the 
Acquisition;

(c)the Admission of the New Aviva Shares becoming effective or if Aviva and RAC so determine and (subject to 
the consent of the Panel) the UKLA agreeing to admit such shares to the Official List and the London Stock Exchange 
agreeing to admit such shares to trading subject only to (i) the allotment of such shares and/or (ii) the Offer 
becoming or being declared unconditional in all respects;

(d)the Financial Services Authority having given notice in writing under section 184(1) of FSMA, in terms 
satisfactory to Aviva, of its approval in respect of any acquisition of or increase in control (as defined in section 
179 of FSMA) over any member of the wider RAC Group which is a UK authorised person (as defined in section 178(4) of 
FSMA) which would result from the Acquisition, or being treated as having given its approval by virtue of section 
184(2) of FSMA;

(e)no government or governmental, quasi-governmental, supranational, statutory or regulatory body, trade 
agency, association, institution or professional body having responsibility for the regulation or supervision of 
consumer credit or financial services having:

(i)withdrawn or refused to renew, or threatened to withdraw or to refuse to renew, any licence or permission; 
or 

(ii)instituted, implemented, taken or omitted, or threatened to take or to omit, any other action,

the effect of which would be materially and adversely to affect the businesses, assets, prospects or profits of the 
wider Aviva Group or of the wider RAC Group, as the case may be and upon no such licences or permissions terminating 
or otherwise becoming invalid as a result of the Offer or its implementation the effect of which would be materially 
and adversely to affect the businesses, assets, prospects or profits of the wider RAC Group;

(f)there being no provision of any agreement, arrangement, licence, permit or other instrument to which any 
member of the wider RAC Group is a party or by or to which any such member or any of its assets may be bound, entitled 
or subject, which in consequence of the Offer or the proposed acquisition of any shares or other securities in RAC or 
because of a change in the control or management of RAC or otherwise, could or might result (in each case to an extent
which is material in the context of the wider RAC Group) in:

(i)any moneys borrowed by or any other indebtedness (actual or contingent) of, or grant available to any such 
member, being or becoming repayable or capable of being declared repayable immediately or earlier than their or its 
stated maturity date or repayment date or the ability of any such member to borrow moneys or incur any indebtedness 
being withdrawn or inhibited or being capable of becoming or being withdrawn or inhibited;

(ii)any such agreement, arrangement, licence, permit or instrument or the rights, liabilities, obligations or 
interests of any such member thereunder being terminated or modified or affected or any obligation or liability arising
or any action being taken thereunder;

(iii)any assets or interests of any such member being or falling to be disposed of or charged or any right 
arising under which any such asset or interest could be required to be disposed of or charged;

(iv)the creation or enforcement of any mortgage, charge or other security interest over the whole or any part of
the business, property or assets of any such member;

(v)the rights, liabilities, obligations or interests of any such member in, or the business of any such member 
with, any person, firm or body (or any arrangement or arrangements relating to any such interest or business) being
terminated, adversely modified or affected; 

(vi)the value of any such member or its financial or trading position or prospects being prejudiced or adversely 
affected; 

(vii)any such member ceasing to be able to carry on business under any name under which it presently does so; or

(viii)the creation of any liability, actual or contingent, by any such member,


and no event having occurred which, under any provision of any agreement, arrangement, licence, permit or other 
instrument to which any member of the wider RAC Group is a party or by or to which any such member or any of its assets
may be bound, entitled or subject, could result in any of the events or circumstances as are referred to in 
sub-paragraphs (i) to (viii) of this condition (f) (in each case to an extent which is material in the context of the 
wider RAC Group);

(g)no government or governmental, quasi-governmental, supranational, statutory, regulatory, environmental body, 
court or trade association in any jurisdiction (each a Third Party) having decided to take, institute, implement or 
threaten any action, proceeding, suit, investigation, enquiry or reference, or enacted, made or proposed any statute, 
regulation, decision or order, or having taken any other steps which would or might reasonably be expected to:

(i)require, prevent or delay the divestiture, or alter the terms envisaged for any proposed divestiture by any 
member of the wider Aviva Group or any member of the wider RAC Group of all or any portion of their respective 
businesses, assets or property or impose any limitation on the ability of any of them to conduct their respective 
businesses (or any of them) or to own any of their respective assets or properties or any part thereof, where this
would have a material effect in the context of the wider RAC Group;

(ii)require, prevent or materially delay the divestiture by any member of the wider Aviva Group of any shares or
other securities in RAC;

(iii)impose any limitation on, or result in a material delay in, the ability of any member of the wider Aviva 
Group directly or indirectly to acquire or to hold or to exercise effectively any rights of ownership in respect of 
shares or loans or securities convertible into shares or any other securities (or the equivalent) in any member of the
wider RAC Group or the wider Aviva Group or to exercise management control over any such member;

(iv)otherwise adversely affect the business, assets, profits or prospects of any member of the wider Aviva Group
or of any member of the wider RAC Group to an extent which is material in the context of the wider RAC Group;

(v)make the Offer or its implementation or the acquisition or proposed acquisition by Aviva or any member of 
the wider Aviva Group of any shares or other securities in, or control of RAC void, illegal, and/or unenforceable under
the laws of any jurisdiction, or otherwise, directly or indirectly, restrain, restrict, prohibit, delay or otherwise
materially interfere with the same, or impose additional conditions or obligations with respect thereto, or otherwise 
challenge or interfere therewith;

(vi)require any member of the wider Aviva Group or the wider RAC Group to offer to acquire any shares or other 
securities (or the equivalent) or interest in any member of the wider RAC Group or the wider Aviva Group owned by any 
Third Party;

(vii)impose any material limitation on the ability of any member of the wider RAC Group to co-ordinate its 
business, or any part of it, with the businesses of any other members; or

(viii)result in any member of the wider RAC Group ceasing to be able to carry on business under any name under 
which it presently does so,

and all applicable waiting and other time periods during which any such Third Party could institute, implement or 
threaten any action, proceeding, suit, investigation, enquiry or reference or any other step under the laws of any 
jurisdiction in respect of the Offer or the Acquisition having expired, lapsed or been terminated;

(h)all necessary filings or applications having been made in connection with the Offer and all statutory or 
regulatory obligations in any jurisdiction having been complied with in connection with the Offer or the acquisition 
by any member of the wider Aviva Group of any shares or other securities in, or control of, RAC and all authorisations,
orders, recognitions, grants, consents, licences, confirmations, clearances, permissions and approvals (collectively 
Consents) reasonably deemed necessary or appropriate by Aviva or any member of the Aviva Group for or in respect of the
Offer or the proposed acquisition of any shares or other securities in, or control of, RAC by any member of the wider
Aviva Group having been obtained in terms and in a form reasonably satisfactory to Aviva from all appropriate Third 
Parties or persons with whom any member of the wider RAC Group has entered into contractual arrangements and all such 
Consents together with all material Consents necessary or appropriate to carry on the business of any member of the 
wider RAC Group remaining in full force and effect and all filings necessary for such purpose have been made and there
being no notice or intimation of any intention to revoke or not to renew any of the same at the time at which the 
Offer becomes otherwise unconditional and all necessary statutory or regulatory obligations in any jurisdiction having 
been complied with;

(i)except as disclosed in the RAC Annual Report and Accounts or as otherwise publicly announced by RAC (by the 
delivery of an announcement to a Regulatory Information Service as specified by the Listing Rules) prior to 9 March 
2005, no member of the wider RAC Group having, since 31 December 2004:

(i)save as between RAC and wholly-owned subsidiaries of RAC or for RAC Shares issued pursuant to the exercise 
of options granted under the RAC Share Option Schemes, issued, authorised or proposed the issue of additional shares 
of any class; 

(ii)save as between RAC and wholly-owned subsidiaries of RAC or for the grant of options under the RAC Share 
Option Schemes, issued or agreed to issue, authorised or proposed the issue of securities convertible into shares of 
any class or rights, warrants or options to subscribe for, or acquire, any such shares or convertible securities;

(iii)other than to another member of the RAC Group, recommended, declared, paid or made or proposed to recommend,
declare, pay or make any bonus in respect of shares, dividend or other distribution whether payable in cash or 
otherwise, save for the proposed RAC final dividend of 15.6p per share for the year ended 31 December 2004 which is 
expected to be paid on 5 May 2005;

(iv)save for intra-RAC Group transactions, merged or demerged with any body corporate or acquired or disposed 
of or transferred, mortgaged or charged or created any security interest over any assets or any right, title or 
interest in any asset (including shares and trade investments) or authorised or proposed or announced any intention to
propose any merger, demerger, acquisition or disposal, transfer, mortgage, charge or security interest, in each case,
other than in the ordinary course of business;

(v)save for intra-RAC Group transactions, made or authorised or proposed or announced an intention to propose 
any change in its loan capital;

(vi)issued, authorised or proposed the issue of any debentures or (save for intra-RAC Group transactions), save
in the ordinary course of business, incurred or increased any indebtedness or become subject to any contingent 
liability;

(vii)purchased, redeemed or repaid or announced any proposal to purchase, redeem or repay any of its own shares 
or other securities or reduced or, save in respect to the matters mentioned in sub-paragraph (i) above, made any other 
change to any part of its share capital;

(viii)implemented, or authorised, proposed or announced its intention to implement, any reconstruction, 
amalgamation, scheme, commitment or other transaction or arrangement otherwise than in the ordinary course of business
or entered into or changed the terms of any contract with any director or senior executive to the extent not fairly 
disclosed to the Aviva Group prior to 9 March 2005;

(ix)entered into or varied or authorised, proposed or announced its intention to enter into or vary any 
contract, transaction or commitment (whether in respect of capital expenditure or otherwise) which is of a long term, 
onerous or unusual nature or magnitude or which is or could be materially restrictive on the businesses of any member
of the wider RAC Group or the wider Aviva Group or which involves or could involve an obligation of such a nature or
magnitude or which is other than in the ordinary course of business and in each such case is material in the context 
of the wider RAC Group;

(x)(other than in respect of a member which is dormant and was solvent at the relevant time) taken any 
corporate action or had any legal proceedings started or threatened against it (and which in each such case is or are 
still extant) for its winding-up, dissolution or reorganisation or for the appointment of a receiver, administrative 
receiver, administrator, trustee or similar officer of all or any of its assets or revenues or any analogous 
proceedings in any jurisdiction or had any such person appointed;

(xi)entered into any contract, transaction or arrangement which would be restrictive on the business of any 
member of the wider RAC Group or the wider Aviva Group, to an extent which is material in the context of the wider 
RAC Group other than to a nature and extent which is normal in the context of the business concerned;

(xii)waived or compromised any claim which is material in the context of the wider RAC Group otherwise than in 
the ordinary course of business; or

(xiii)entered into any contract, commitment, arrangement or agreement otherwise than in the ordinary course of 
business  which is material in the context of the wider RAC Group or passed any resolution or made any Offer (which 
remains open for acceptance) with respect to or announced any intention to, or to propose to, effect any of the 
transactions, matters or events referred to in this condition (i),

and, for the purposes of sub-paragraphs (iii), (iv), (v) and (vi) of this condition (i) only, the term RAC Group shall 
mean RAC and its wholly-owned subsidiaries;

(j)since 31 December 2004 and save as disclosed in the RAC Annual Report and Accounts or as otherwise publicly 
announced by RAC (by the delivery of an announcement to a Regulatory Information Service as specified in the Listing 
Rules) prior to 9 March 2005:

(i)no change or deterioration having occurred in the business, assets, financial or trading position or profits
or prospects of any member of the wider RAC Group which is materially adverse in the context of the wider RAC Group;

(ii)no litigation, arbitration proceedings, prosecution or other legal proceedings to which any member of the 
wider RAC Group is or may become a party (whether as a plaintiff, defendant or otherwise) and no investigation by any 
Third Party against or in respect of any member of the wider RAC Group having been instituted announced or threatened
by or against or remaining outstanding in respect of any member of the wider RAC Group which in any such case might 
be expected to adversely affect the wider RAC Group; 

(iii)no contingent or other liability having arisen or become apparent to Aviva which would be likely to 
adversely affect the wider RAC Group; and

(iv)no steps having been taken which are likely to result in the withdrawal, cancellation, termination or 
modification of any licence held by any member of the wider RAC Group which is necessary for the proper carrying on 
of its business where the effect would be materially adverse to the wider RAC Group;

(k)save as disclosed in the RAC Annual Report and Accounts or as otherwise publicly announced by RAC (by the 
delivery of an announcement to a Regulatory Information Service as specified in the Listing Rules) prior to 9 March 
2005 or as otherwise fairly disclosed in writing to Aviva by RAC prior to 9 March 2005, Aviva not having discovered:

(i)that any financial, business or other information concerning the wider RAC Group as contained in the 
information publicly disclosed at any time by or on behalf of any member of the wider RAC Group prior to 9 March 2005
is materially misleading, contains a material misrepresentation of fact or omits to state a fact necessary to make 
that information not misleading;

(ii)that any member of the wider RAC Group partnership, company or other entity in which any member of the wider
RAC Group has a significant economic interest and which is not a subsidiary undertaking of RAC is subject to any 
liability (contingent or otherwise) which is material in the context of the wider RAC Group; or

(iii)any information which affects the import of any information disclosed at any time by or on behalf of any
member of the wider RAC Group to an extent which is material in the context of the wider RAC Group; and

(l)Aviva not having discovered that:

(i)any past or present member of the wider RAC Group has failed to comply with any and/or all applicable 
legislation or regulation, of any jurisdiction with regard to the disposal, spillage, release, discharge, leak or 
emission of any waste or hazardous substance or any substance likely to impair the environment or harm human health or
animal health or otherwise relating to environmental matters, or that there has otherwise been any such disposal, 
spillage, release, discharge, leak or emission (whether or not the same constituted a non-compliance by any person 
with any such legislation or regulations, and wherever the same may have taken place) any of which disposal, spillage, 
release, discharge, leak or emission would be likely to give rise to any liability (actual or contingent) on the part
of any member of the wider RAC Group to an extent which is material in the context of the wider RAC Group; or 

(ii)there is, or is likely to be, for that or any other reason whatsoever, any liability (actual or contingent) 
of any past or present member of the wider RAC Group to make good, repair, reinstate or clean up any property or any 
controlled waters now or previously owned, occupied, operated or made use of or controlled by any such past or present 
member of the wider RAC group, under any environmental legislation, regulation, notice, circular or order of any 
government, governmental, quasi-governmental, state or local government, supranational, statutory or other regulatory 
body, agency, court, association or any other person or body in any jurisdiction where the cost is material in the 
context of the wider RAC Group.

For the purposes of these conditions the wider RAC Group means RAC and its subsidiary undertakings, associated 
undertakings and any other undertaking in which RAC and/or such undertakings (aggregating their interests) have a 
significant interest and the wider Aviva Group means Aviva and its subsidiary undertakings, associated undertakings 
and any other undertaking in which Aviva and/or such undertakings (aggregating their interests) have a significant 
interest and for these purposes subsidiary undertaking, associated undertaking and undertaking have the meanings given 
by the Companies Act, other than paragraph 20(1)(b) of Schedule 4A to the Companies Act which shall be excluded for 
this purpose, and significant interest means a direct or indirect interest in twenty per cent. or more of the equity 
share capital (as defined in the Companies Act).

Aviva reserves the right to waive, in whole or in part, all or any of the above conditions, except conditions (a) and 
(c).

Condition (c) must be fulfilled by, and conditions (b) and (d) to (l) (inclusive) fulfilled or waived by midnight on 
the 21st day after the later of the first closing date of the Offer and the date on which condition (a) is fulfilled 
(or in each such case such later date as Aviva may, with the consent of the Panel, decide).  Aviva shall be under no 
obligation to waive or treat as satisfied any of the conditions (b) and (d) to (l) (inclusive) by a date earlier than 
the latest date specified above for the satisfaction thereof, notwithstanding that the other conditions of the Offer 
may at such earlier date have been waived or fulfilled and that there are at such earlier date no circumstances 
indicating that any of such conditions may not be capable of fulfilment.

If Aviva is required by the Panel to make an offer for RAC Shares under the provisions of Rule 9 of the City Code, 
Aviva may make such alterations to any of the above conditions as are necessary to comply with the provisions of that 
Rule. 

The Offer will lapse (unless otherwise agreed with the Panel) if the European Commission either initiates proceedings 
under Article 6(1)(c) of the Regulation or makes a referral to a competent authority of the United Kingdom under 
Article 9(1) of the Regulation and there is then a reference to the Competition Commission before the later of 3.00 p.m
. on the first closing date of the Offer and the date on which the Offer becomes or is declared unconditional as to 
acceptances.

If the Offer lapses, the Offer will cease to be capable of further acceptance and Aviva and the accepting RAC 
Shareholders will cease to be bound by acceptances submitted at or before the time when the Offer so lapses.

This Offer will be governed by English law and be subject to the jurisdiction of the English courts, to the conditions 
and further terms set out in this Appendix I and in the formal Offer Document and the related Form of Acceptance.

Part B:Certain further terms of the Offer

Fractions of New Aviva Shares will not be allotted or issued to persons accepting the Offer. Fractional entitlements to
New Aviva Shares will be aggregated and sold in the market and the net proceeds of sale will be distributed pro rata 
to persons entitled thereto.  However, individual entitlements to amounts of less than £3 will not be paid to persons 
accepting the Offer but will be retained for the benefit of the Enlarged Aviva Group.

The Offer will not be made, directly or indirectly, in, into or from, or by the use of mails or any means or 
instrumentality (including, without limitation telephonically or electronically) of interstate or foreign commerce of, 
or of any facility of a national, state or other securities exchange of, nor will it be made in, into or from the US,
Australia, Canada or Japan and the Offer will not be capable of acceptance by any such use, means, instrumentality or 
facility or from within the United States, Canada, Japan or Australia.

The New Aviva Shares to be issued pursuant to the Offer have not been and will not be registered under the US 
Securities Act nor under any of the relevant securities laws of Canada, Japan or Australia.  Accordingly, the New 
Aviva Shares may not be offered, sold or delivered, directly or indirectly, in the United States, Canada, Japan or 
Australia nor to any United States person, except pursuant to exemptions from applicable requirements of any such 
jurisdiction.

The New Aviva Shares to be issued pursuant to the Offer will be issued credited as fully paid and will rank pari passu 
in all respects with the existing Aviva Shares.  The RAC Shareholders will not be entitled to Aviva's proposed final 
dividend of 16p per share for the year ended 31 December 2004. 

RAC Shares will be acquired by or on behalf of Aviva under the Offer fully paid and free from all liens, charges, 
equitable interests, encumbrances, rights of pre-emption and other third party rights and interests and together with 
all rights attaching thereto, including voting rights and the right to receive and retain all dividends and other 
distributions declared, made or paid after this announcement, save for the proposed RAC final dividend of 15.6p per 
share for the year ended 31 December 2004 proposed to be paid on 5 May 2005.

 
APPENDIX II

Sources and bases of information

Save as otherwise set out in this announcement, the following constitute the bases and sources of certain information 
referred to in this announcement:

1.The financial information relating to Aviva has been extracted from its audited annual accounts for the 
relevant periods and the interim audited financial statements for the relevant periods as published by Aviva, all of 
which are prepared in accordance with UK GAAP.
2.The financial information relating to NUI has been extracted from its audited annual accounts for the 
relevant periods as published by NUI, all of which are prepared in accordance with UK GAAP.
3.The financial information relating to RAC has been extracted from its audited annual accounts for the 
relevant periods and the interim audited financial statements for the relevant periods as published by RAC, all of 
which are prepared in accordance with UK GAAP.
4.The value placed on the entire issued ordinary share capital of RAC by the Acquisition is based on 
118,807,243 RAC Shares in issue on 8 March 2005, being the last Business Day before this announcement.
5.All prices quoted for RAC Shares and Aviva Shares are Closing Prices.

 
APPENDIX III
Definitions used in this announcement
The following definitions apply throughout this announcement unless the context otherwise requires:
Acquisition means the proposed acquisition of the entire issued and to be issued share capital of RAC by Aviva;
Admission means the admission of New Aviva Shares to the Official List in accordance with the Listing Rules and the 
admission of such shares to trading on the London Stock Exchange's market for listed securities in accordance with the 
Admission and Disclosure Standards of the London Stock Exchange; 
Australia means the Commonwealth of Australia and its dependent territories;
Aviva means Aviva plc;
Aviva Group means Aviva and its subsidiaries and, where the context permits, each of them;
Aviva Shares means the ordinary shares of 25 pence each in the capital of Aviva;
Aviva Shareholders means the holders of Aviva Shares;
Business Day means a day (excluding Saturdays, Sundays or public holidays) on which banks generally are open in the 
City of London for the transaction of normal banking business;
Canada means Canada, its possessions, territories and all areas subject to its jurisdiction or any political 
sub-division thereof;
City Code means the City Code on Takeovers and Mergers;
Closing Price means the closing middle market quotation of a RAC Share or an Aviva Share (as the context requires) as 
derived from the Daily Official List;
Companies Act means the Companies Act 1985;
CREST means the computerised settlement system to facilitate the transfer of title to shares in uncertificated form 
operated by CrestCo Limited;
Daily Official List means the daily official list of the London Stock Exchange;
Enlarged Aviva Group means the Aviva Group as enlarged on completion of the Acquisition;
Form of Acceptance means the form of acceptance relating to the Offer which will accompany the Offer Document;
FSMA means the Financial Services and Markets Act 2000; 
Goldman Sachs means Goldman Sachs International; 
Hoare Govett means Hoare Govett Limited;

Japan means Japan, its cities, prefectures, territories and possessions;

JPMorgan Cazenove means JPMorgan Cazenove Limited;

Lazard means Lazard & Co., Limited;

Listing Rules means the listing rules and regulations of the UK Listing Authority as amended from time to time, and 
contained in the UK Listing Authority's publication of the same name;

London Stock Exchange means London Stock Exchange plc or its successor;
Mix and Match Facility means the mix and match facility under which RAC Shareholders may, subject to availability, 
elect to vary the proportion of New Aviva Shares and cash they will receive under the Offer;
New Aviva Shares means the Aviva Shares proposed to be issued and credited as fully paid pursuant to the Offer;
NUI means Norwich Union Insurance Limited;

Offer means the recommended offer to be made by Goldman Sachs and JPMorgan Cazenove on behalf of Aviva to acquire all 
of the issued and to be issued RAC Shares (other than any already owned by a member of the Aviva Group) on the terms 
and subject to the conditions set out in this announcement and to be set out in the Offer Document and the Form of 
Acceptance and, where the context so requires, any subsequent revision, variation, extension or renewal of such Offer; 

Offer Document means the document to be sent to RAC Shareholders which will contain, inter alia, the terms and 
conditions of the Offer;
Official List means the official list maintained by the UK Listing Authority;
Panel means the Panel on Takeovers and Mergers;
RAC means RAC plc;

RAC Annual Report and Accounts means the audited annual consolidated financial statements of the RAC Group for the 
financial year ended 31 December 2004;

RAC Group means RAC and its subsidiaries and, where the context permits, each of them;
RAC Share Option Schemes means the Sharesave Scheme, Executive Share Option Scheme (1994) and Executive Share Option 
Scheme (2001) and RAC Share Option Scheme means any one of them;
RAC Shares means the ordinary shares of 25 pence each in the capital of RAC;
RAC Shareholders means the holders of RAC Shares;
Regulatory Information Service means any of the services set out in Schedule 12 to the Listing Rules;
UK Listing Authority or UKLA means the Financial Services Authority acting in its capacity as the competent 
authority for the purposes of Part VI of FSMA;

United Kingdom or UK means the United Kingdom of Great Britain and Northern Ireland; 

US or United States means the United States of America, its territories and possessions, any State of the United 
States of America and the District of Columbia and all other areas subject to its jurisdiction; and

US Securities Act means the United States Securities Act of 1933 and the rules thereunder. 

All references to legislation in this announcement are to English legislation unless the contrary is indicated.

Any reference to any provision of any legislation shall include any amendment, modification, re-enactment or extension 
thereof.
For the purposes of this announcement, subsidiary has the meaning under the Companies Act.
References to £, pence and p are to the lawful currency of the United Kingdom.
Words importing the singular shall include the plural and vice versa, and words importing the masculine gender shall 
include the feminine or neutral gender.







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