Car rental giant Avis confirms merger with… Avis
Avis Budget has agreed terms to purchase Avis Europe, reuniting the two brands for the first time in 25-years.
Under the terms of the transaction, Avis Europe shareholders will receive 315 pence per share, valuing the company at approximately £636 million.
This represents a premium of approximately 60.2 per cent over the closing price of 196.6 pence per Avis Europe Share on June 13th 2011.
When completed, the merger will create a company will have revenue of approximately $7 billion and owned or licensed operations in more than 150 countries.
In addition, the deal will give Avis Budget an increased presence in rapidly growing international markets, including India and China.
Announcing the deal Ronald Nelson, chairman and chief executive officer of Avis Budget said: “This transaction represents an outstanding opportunity for Avis Budget, and the acquisition of a business that we have long sought to own.
“The transaction re-unites the global operation of the Avis and Budget brands under one corporate umbrella, and is both financially and strategically compelling.
“We expect the combination of our two companies will allow us to more effectively serve vehicle-rental customers worldwide, and to achieve synergies of more than $30 million per year.”
Because the Avis Europe and Avis Budget Groups generally do not have operations in the same jurisdiction, the acquisition is not expected to face significant antitrust obstacles.
Morgan Stanley and Citi are acting as joint financial advisers to Avis Budget, while Barclays Capital is acting as sole financial adviser to Avis Europe.
Commenting on the proposals, Pascal Bazin, chief executive officer of Avis Europe, said: “Over the last three years, we are proud to have delivered a successful transformation and turnaround of our business, together with successful geographic development in fast growing territories and development of new mobility offers.
“Today’s announcement of the recommended acquisition of Avis Europe by Avis Budget enables us to provide both a compelling substantial immediate cash return to shareholders and an exciting opportunity for Avis Europe’s customers, employees, partners and licensees to benefit from the many advantages that will come from being part of a combined Avis Europe and Avis Budget Group with our two strong global brands, increased scale and improved access to capital.”