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Hertz vs. Avis: Antitrust Issues Involved in Dollar Acquisition

A $1.43 billion bid from Park Ridge, New Jersey-based Hertz Global Holdings, Inc. to acquire Dollar Thrifty Automotive Group Inc. was accepted by Dollar’s board this week. Hertz had been competing with Parsippany-based Avis Budget Group Inc. in its effort to acquire Dollar Thrifty.

Dollar Thrifty said that one reason their board ultimately favored the Hertz deal is that it includes a $44.6 million reverse breakup fee. Dollar Thrifty said that the Avis deal did not include breakup protection. They also believe that an Avis-Dollar Thrifty merger might have more difficulty gaining the approval of antitrust regulators and that Avis did not do enough to address these concerns.

Dollar Thrifty thought that antitrust regulators might not approve of a merger with Avis because Avis’s Budget Rent A Car division has a similar airport car rental market share as Dollar Thrifty, according to the Los Angeles Times.

In addition to the breakup fee protection, Hertz Chairman and CEO Mark Frissora has said that the company is already working on selling off its Advantage Rent-a-Car division to help the deal quickly gain approval from antitrust regulators. Hertz’s Advantage Rent-a-Car division has a much smaller share of the budget airport car rental market than Dollar or Avis.

Dollar Thrifty shareholders will vote on the Hertz bid on September 30.



Dollar Thrifty accepts Hertz’s new $1.43 billion offer (Los Angeles Times)

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