Avis Budget Group Inc. has announced its intent to buy Zipcar Inc, the world’s leading car sharing network, for around $500 million, expanding on their existing car rental services. Avis will pay $12.25 per share, which is a 49 percent premium to Zipcar’s Friday closing price. If Zipcar shareholders approve it, the sale is expected to go through in the spring.
Car sharing has become a popular alternative to owning or renting a car—it’s cheaper and more convenient, not to mention greener. Zipcar and other such services have been successful in significantly reducing the number of vehicles on the road, reportedly by up to 15 personal vehicles for each car sharing vehicle. Zipcar, one of the world’s largest car sharing services, was founded in 2000 and has more than 760.000 members.
“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 Avis CEO Ronald Nelson in a statement.
Upon the sale, Zipcar Inc. will become an Avis subsidiary and have headquarters in Boston. Scott W. Griffith, Zipcar’s chief executive, and Mark D. Norman, its president and chief operating officer, are expected to stay on.
The group wants to accelerate the growth of Zipcar by putting more cars in more locations and adopt some of Zipcar’s technology for the Avis and Budget brands. According to Avis, the addition of the company’s fleet to the car sharing service could meet more of Zipcar’s heavy weekend demand.
Via CBS News