The Week: AA and Saga merger will prompt £40m media review

The merger between the AA and the over-50s specialist Saga will result in a pitch for the combined company's £40 million media account.

The review will pit Saga's agency Carat against PHD, the incumbent on the AA account and, according to insiders, will follow once the deal goes through next year.

The AA and Saga deal, announced this week, values the two companies at £6.15 billion. Saga's 3,900 staff will join the AA's 7,200 employees under the ownership of Permira, CVC and Charterhouse, the three private equity companies behind the merger.

Saga will have control of the combined business, although both companies will continue to operate independently. The Saga chief executive, Andrew Goodsell, will run the new company, while the AA chief executive, Tim Parker, is to step down.

Goodsell said the deal would allow the businesses to retain their identities while enabling cross-selling of their products to each other's customer base.