After a long courtship, car rental companies Hertz and Dollar Thrifty have sealed the deal.
Shares of both companies surged Monday, a day after Hertz said that it would buy Dollar Thrifty for $87.50 per share in a cash transaction valued at $2.3 billion. Hertz (HTZ) stock rallied 11%. Dollar Thrifty (DTG) shares jumped 7% in early trading.
Hertz first announced plans to buy Dollar Thrifty in April 2010 for $1.2 billion in cash and stock. But rival car rental company Avis Budget (CAR) shook things up the next week, when it offered to top Hertz's bid.
After three years of talks, Dollar Thrifty Chief Executive Scott Thompson said in a statement that he was pleased to have reached a "win-win" agreement with Hertz.
Hertz Chief Executive Mark Frissora agreed, calling it "a lengthy – but worthwhile – pursuit."
The combined companies would have estimated global sales of $10.1 billion and roughly $1.8 billion of earnings, according to their joint release. The combined entity will have 10,000 locations worldwide.
The deal, which is subject to regulatory approval, is expected to close in October.
Hertz also announced plans to sell its discount rental car brand Advantage to Franchise Services of North America, which operates Rent-a-Wreck and other low-end rental car businesses, and Macquarie Capital.
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