Hertz Global Holdings has signed an agreement to buy Dollar Thrifty Automotive Group in a move officials said will help Hertz grow its global footprint and become the second largest vehicle-rental company in the U.S..
Hertz is paying approximately $1.2 billion in cash and stock to acquire Dollar Thrifty.
"Having Dollar Thrifty under the Hertz family of brands, products and services will allow us to expand our global presence, boost our market position and realize the financial benefits from substantial synergies from between the two companies," Hertz chairman and chief executive officer Mark Frissora said during a conference call Monday.
Frissora said the company hasn't had any "officials discussions" with the Federal Trade Commission yet, but suggested that Hertz remains "very confident" the transaction will gain approval.
"We feel pretty good about our position there. We've certainly been advised by a great team of lawyers and so has Dollar Thrifty," he noted. "Based on that review, we feel highly confident the transaction will pass the muster.
"I think it's fair to say we wouldn't have embarked on this transaction unless we had a high degree of confidence that it would be approved," Frissora continued.
In an official statement, Dollar Thrifty president and chief executive officer Scott Thompson talked about how the landscape of the rental market has changed over the last few years, and how joining Hertz will be beneficial.
"Being associated with a larger company that has a broader base of revenues and access to greater technology will allow the Dollar and Thrifty brands to grow at a much more rapid pace than as a stand-alone company," Thompson noted.
"Enterprise's acquisition of Alamo and National a few years ago certainly changed the industry and our competitive position," he explained further. "Our relative size compared to the big three in the industry (Enterprise, Avis and Hertz) made an offer to join a larger company compelling."