Rental car companies Hertz Global Holdings and Dollar Thrifty Automotive Group announced that they have reached a merger agreement. The deal would see Hertz buy Dollar Thrifty for $2.3 billion. Hertz also will thus sell its Advantage car rental business to Franchise Services of North America.
Hertz has sought to buy Dollar Thrifty for nearly three years. The Dollar Thrifty Automotive Group comprises the Dollar Rent a Car and Thrifty Car Rental brands, both of which will become part of Hertz's empire under the deal. In a slideshow shown to investors, Hertz said that it currently has 8500 rental locations (including 26 percent of U.S. airports) and 23,900 employees. Dollar Thrifty has 280 locations and 5900 employees.
Hertz says it will benefit from improved economies of scale, in part by being able to get better deals on higher volumes of new cars from automakers. The company also gets access to more rental locations. Dollar Thrifty, meanwhile, says it will be able to expand its low-budget car rental operations to more regions.
The two companies are now working with the Federal Trade Commission to ensure they can obtain regulatory approval for the merger. The boards of directors of both Hertz and Dollar Thrifty have already approved the deal.