Hertz acquires Dollar Thrifty: Benefits and other details

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michelle

27 April, 2010

US car rental major Hertz Global Holdings will acquire its rival Dollar Thrifty Automotive Group in a cash and stock deal valued at $1.2 billion. Both companies are multinationals and operate in many Indian cities too. A definitive agreement has been sig

US CAR rental major Hertz Global Holdings will acquire its rival Dollar Thrifty Automotive Group in a cash and stock deal valued at $1.2 billion. Both companies are multinationals and operate in many Indian cities too. A definitive agreement has been signed between the two wherein Hertz would acquire NYSE listed Dolllar thrifty for a purchase price of $41 a share in a mix of cash and Hertz common stock. Going by media reports, the transaction would be worth more than $1 billion.

The transaction would strengthen Hertz's presence in the leisure car rental market. Dollar Thrifty’s strong international presence will likely complement Hertz’s global footprint and enable them to utilise a recognised brand to accelerate their leisure rental strategy in Europe and other markets.

Shares of Hertz, rose as much as 18 percent to touch a two year high in morning trade. Hertz said that the combined company would have an overall US market share of 23 percent. It trails privately held Enterprise Rent A Car which has a market share of 53 percent

After the acquisiton, Hertz brand will continue to be a commercial high end travel brand, while Dollar Thrifty and (Hertz's) Advantage brands will continue to be used to penetrate leisure, summer, spring-break vacation travel.