WASHINGTON -- Hertz Global Holdings Inc. said Monday it had struck a long-sought deal, acquiring Dollar Thrifty Automotive Group Inc. for $2.3 billion as the rental car industry continued to consolidate.
Hertz and rival Avis Budget Group, the second- and third-largest industry players behind leader Enterprise Rent-A-Car, have been jockeying to buy Dollar Thrifty, the No. 4 company.
“We are pleased to have finally reached an agreement with Dollar Thrifty after a lengthy -- but worthwhile -- pursuit,” said Hertz Chief Executive Mark P. Frissora. “We’ll be a stronger global competitive player with a full range of rental options not only in the U.S. but in Europe and other markets given Dollar Thrifty’s strong international presence.”
The combined company would have about 10,000 locations around the world and allows Hertz to move into the mid-tier rental car market with both the Dollar and Thrifty brands.
Hertz will pay $87.50 per share for Dollar Thrifty, about 8% above its Friday close. Dollar Thrifty shares were up about 7% in early trading Monday, to near $87, on the news. Hertz shares were up about 12% to $14.79 in early trading.
Dollar Thrifty is the last of the smaller rental car companies to be snatched up by big players in a consolidation spree that has left consumer advocates worried. The Federal Trade Commission must approve the Hertz deal for Dollar Thrifty.
Showing its concern about possible regulatory hurdles, Hertz said Monday it had agreed to sell its lower-tier Advantage business to Macquarie Capital and Franchise Services of North America, which has several rental car subsidiaries, including Rent-a-Wreck.
The Advantage deal is contingent on Hertz closing its purchase of Dollar Thrifty, Hertz said.