NEW YORK: US car rental giant Avis announced plans yesterday to buy the popular auto-sharing service Zipcar in a deal valued at $500m.
The move gives Avis an entry into the growing market for car-sharing with the company which offers rentals on an hourly basis by giving customers a smart card to unlock vehicles on a self-serve basis. Avis Budget Group agreed to pay $12.25 per share in cash, a 49 percent premium over the Zipcar closing price on Monday. The transaction is subject to approval by Zipcar shareholders and other conditions, and is expected to be completed in the next few months.
The companies said car-sharing has grown to be a $400m business in the United States and is expanding rapidly around the world. Zipcar has more than 760,000 members, known as Zipsters, and is the sector leader in 20 metropolitan areas in the US, Canada and Europe. It also has cars at over 300 college and university campuses.
“By combining with Zipcar, we will significantly increase our growth potential, both in the United States and internationally, and will position our company to better serve a greater variety of consumer and commercial transportation needs,” said Ronald Nelson, Avis chairman and chief executive.
“We see car sharing as highly complementary to traditional car rental, with rapid growth potential and representing a scalable opportunity for us as a combined company.”
AFP
