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Hertz completes Dollar Thrifty acquisition

Hertz and Dollar Thrifty LogosHertz Global Holdings has announced its successfully completed acquisition of Dollar Thrifty Automotive Group.  This makes the smaller, budget car rental operator a wholly-owned subsidiary.  This follows Hertz completing a tender offer, under which it bought about 99.6% of Dollar Thrifty common stock in cash at $87.50 per share.  The remaining shares were then purchased by means of a short-form merger, which saw the shares converted into the right to receive $87.50 per share in cash.  To complete the short-form merger, Hertz used its top-up option to buy additional Dollar Thrifty common stock straight from the company, which won’t be listed on the New York Stock Exchange any longer.

Hertz chairman and chief executive Mark P. Frissora says that Hertz, its business partners and its staff have never been so excited in the company’s 94-year history.  In the last six years, they have been a successful competitor with only one global premium brand, while their rivals have had multiple brands working against them.  Starting today, they have two more popular brands to compete in multiple market segments.  They plan to offer them to their many business partners and consumers.  They are pleased to announce that the transaction to acquire Dollar Thrifty is finished, and they look forward to working actively with the new subsidiary to integrate the strengths of both companies.

It wasn’t easy for Hertz to acquire Dollar Thrifty, as it had to make a divestiture agreement with the Federal Trade Commission (FTC).  The company has had to sell its low-cost Advantage Rent a Car subsidiary to Franchise Services of North America (FSNA) and Macquarie Capital.  It has also sold the right to run 29 Dollar Thrifty on-airport locations in the US – 16 will go to FSNA and Macquarie, and the other 13 will either be sold to the companies or another buyer that the FTC approves.

Hertz and Dollar Thrifty offer car hire to leisure and business consumers, including those arriving at airports across the US.  They are two of the four major car hire operators in the country, which means that their merger will only leave three.  Together, they account for about 98% of total airport rentals in the US.

FSNA has provided an update on the timing of its acquisition of Advantage Rent a Car as well.  The company has agreed to purchase Simply Wheelz, LLC, which is the owner of the Advantage brand.  It has also agreed to buy other divested assets from Hertz Global Holdings.  These acquisitions have been subject to the completion of Hertz’s acquisition of Dollar Thrifty, and now they can go ahead.

This means that FSNA will begin operating 62 Advantage Rent a Car locations, which serve airports across the US.  If the company decides to purchase the 13 additional on-airport locations, it will gain a net ten new locations.  As a result, the company can also buy up to 72 rental locations in new US markets.  Closing of the Advantage acquisition by Macquarie Capital is due to take place on 12 December, and the acquisition of remaining assets is due to close in the first quarter of next year.

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