27 April 2010

Hertz in billion dollar-plus acquisition

Hertz Global Holdings Inc. by acquiring rival Dollar Thrifty Automobile Group for USD$1.17 billion will give its leisure segment a much-needed boost.

"Together we will be able to compete even more effectively and efficiently against other multi-brand car rental companies, offering customers a full range of rental options in the U.S.," Hertz CEO Mark Frissora said in a statement.

The move is also expected to boost Hertz’s international efforts because of Dollar’s worldwide presence.

Hertz is already the world’s largest car rental company. The deal will give it a third more locations around the globe, boosting its total to 9,800 sites.

Hertz's business is roughly split between vacation and business travelers, while Dollar Thifty's customers are mostly vacationers hunting for cheap rentals, according to the AP.

Under the terms of the deal, Dollar Thrifty will become a wholly owned unit of Hertz.

Hertz, based in Park Ridge, N.J., expects the deal to start adding to profits immediately, and said it has already identified at least $180 million in potential cost cuts from combining the two businesses.

Shares of both companies soared.

By David Wilkening