The deal also involved the sale of the Advantage Rent-a-Car unit of Hertz to Franchise Services, a North American car rental franchiser, and Macquarie Capital.
Mark P. Frissora, the chief executive and chairman of Hertz, indicated that the company was pleased with the deal with Dollar Thrifty, which followed a rather long pursuit by the company. He indicated that the merge is the best move for the two companies and it will result to a stronger international player offering numerous rental options in the US, Europe and other markets serviced by Dollar Thrifty.
Hertz
On the other hand, Scott Thompson, chairman, chief, and president of Dollar Thrifty said that the company was satisfied with the win-win deal following three years of discussions in connection to the merger. The deal follows a number of consolidations in the car rental industry with Dollar Thrifty being considered as among the last appealing targets for acquisition.
Dollar Thrifty was in danger of becoming insolvent in 2008 although it has experienced increasing annual profits after this. Ford was initially a part of Ford before an initial public offering in 2005 resulted to its spinning off and acquisition by a group headed by the Carlyle Group (NASDAQ:CG). Hertz was made public again in 2006 by the Carlyle Group.
It took around three years for the deal to be finalized as it went through a number of discussions on the price and uncertainty of getting the antitrust approval for the deal. However with the planned sale of Advantage, the Federal Trade Commission may give its approval for the deal.
Hertz initially offered $41 per share for Dollar Thrifty over two years ago, which also saw Avis (NASDAQ:CAR) bidding for the company. The initial offer of Hertz was rejected by the shareholders of Dollar Thrifty even as Avis made an offer that was considerably higher. However it was more difficult for Avis to go past antitrust concerns since its discount business was larger compared to Hertz, which would not make it easy to get antitrust approval.
With the deal for Avis to acquire its European division, industry watchers have indicated that Avis was no longer interested in Dollar Thrifty. Another offer made by Hertz in May 2011 was still beset with antitrust concerns before the company withdrew the offer in October.
Discussions between the two companies continued until the deal was finalized recently.
