Hertz wins US antitrust approval for $2.56 bn acquisition of Dollar Thrifty Automotive
16 Nov 2012
Hertz Global Holdings has finally won approval from US antitrust regulators for its $2.56 billion acquisition of smaller rival Dollar Thrifty Automotive Group, ending a two-year standoff with the US Federal Trade Commission (FTC).
Park Ridge, New Jersey-based Hertz has been chasing Dollar Thrifty since 26 April 2010 with an offer to pay $87.50-a-share, valuing its smaller car-rental rival at $2.3 billion. The merger had already been approved by the boards of both companies. (See: Hertz to buy Dollar Thrifty for $2.3 bn after years of standoff)
After a bidding war with arch rival Avis Budget Group Inc, and Avis finally backing out, the Hertz-Dollar Thrifty deal got caught in regulatory hurdles.
Tulsa, Oklahoma-based Dollar Thrifty operates Dollar Rent A Car and Thrifty Car Rental brands in domestic leisure travel in virtually the entire top US and Canadian airport markets, as well as international travelers to the US under contracts with various international tour operators.
The merger will create a global, multi-brand rental car leader with a full range of rental options for both corporate and leisure business in all three tiers of the car rental market.
The merger would leave only three companies holding more than 95 per cent of the $22 billion US car rental market.
Four of the largest US car rental companies hold around 80 per cent of the $22 billion US car rental market, with Enterprise holding 38 per cent, Hertz with 18.9 per cent, Avis with 18.5 per cent and Dollar Thrifty with about 5 per cent.
In order to ease regulatory concerns, Hertz had earlier agreed to sell its Advantage Rent-A-Car business to Franchise Services of North America and Macquarie Capital.
But the FTC was reported to be bargaining hard with Hertz over further divestitures as it felt that the merger would lead to ''substantially more concentration in 72 airport rental-car markets'' and give the merged company a free hand to increase rental car rates in the in 72 airports.