FLEETS are set to benefit from a cut-throat battle for business in the breakdown recovery market after Cendant Corporation, owner of Green Flag, pulled out of a deal to buy RAC Motoring Services. It has vowed instead to attack its rival and the AA for market share.

Cendant's £450 million bid for RACMS was effectively blocked after the Department of Trade and Industry accepted the findings of a Monopolies and Mergers Commission report which said the deal could not go ahead unless the US corporation sold Green Flag. Cendant, which also owns PHH Vehicle Management, said it had made clear the purchase price was based on savings which could only be made from merging behind-the- scenes operations at the two roadside recovery organisations.

Now both companies are going head-to-head in a battle for fleet business in the UK, threatening to put the market leader, the AA, under pressure.

Cendant Corporation vice-chairman Stephen Holmes said: 'Green Flag has made some in-roads into the fleet sector and any potential for growth will be exploited, with fleet one area where we intend to grow our presence.' Neil Johnson, chief executive officer of RAC Holdings, said the firm would protect its hold on the fleet market.