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US car retailer AutoNation is in talks to acquire Inchcape UK

American car retailer AutoNation is considering a bid for Inchcape’s UK operations, it has reported News of Heaven citing sources.

With a market capitalization of around £5.5bn, AutoNation is among the potential buyers since Inchcape announced a strategic review in January 2024.

People familiar with the development told the publication that the deal could be worth around £350m and would mark AutoNation’s entry into the UK market.

AutoNation is in the early stages of considering Inchcape’s UK proposal, sources said.

However, it is uncertain whether AutoNation will proceed with the bid.

If the deal goes through, it will mark a significant move for AutoNation, which has already shown interest in the UK market by engaging in a bidding war for Pendragon, another London-based car dealer.

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The potential sale of Inchcape’s UK operations is part of ongoing changes in the industry.

Last year, Lithia Motors bought Jardine Motors from Jardine Matheson Holdings and agreed to buy Pendragon’s dealerships and leasing businesses.

Lookers Motor Group has been acquired by Canada’s Alpha Auto Group in a £465m deal.

Inchcape’s UK division operates 70 sites and employs 3,700 staff, representing manufacturers such as Audi, BMW, Jaguar, Toyota and Volkswagen.

The disposal of the UK retail locations will enable Inchcape to focus on its distribution operations, which are present in more than 40 countries and contribute to more than 90% of the group’s profits.

An industry source highlighted that a move away from the UK car market could improve Inchcape’s market outlook, which could lead to a higher stock count.

Over the past year, Inchcape shares have seen a modest rise, resulting in a market capitalization of £3bn.

With a history dating back to 1847, Inchcape has been actively expanding globally in recent years, acquiring businesses in China, Australia, and continental Europe.

The sale of its UK retail business, which contributes relatively little to the group’s overall profits, would be a landmark decision for the company.

Further consolidation in the industry could leave Vertu Motors as the only UK car dealer listed in London if the Inchcape sale goes ahead.

AutoNation did not respond to requests for comment, and Inchcape declined to comment for this story.

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