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3 January 2012 | Adam Leach
Car rental business Avis Budget Group is to acquire car share firm Zipcar in a deal valued at around $500 million (£308 million).
As a result of the acquisition, which will be completed in the spring of this year, Avis predicts that the enlarged group will benefit from annual synergies of $50-$70 million (£31-£43 million), with procurement savings, delivered largely through consolidating spend, playing a particularly key part in delivering the efficiencies.
The company added it would look to deliver savings by increasing fleet utilisation across the two companies, in particular, by using the larger fleet of Avis to meet demand from Zipcar customers at weekends.
Ronald Nelson, chairman of Avis Budget Group, said: “By combining with Zipcar, we will significantly increase our growth potential, both in the US and internationally, and will position our company to better serve a greater variety of consumer and commercial transportation needs. 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.”
Zipcar was founded in 2000 and is currently the world’s largest car sharing company with more than 767,000 members. Avis Budget announced that it expects members of the Zipcar management team, including president and CEO Scott Griffith to continue to lead operations at the company.
As well as announcing the deal, Avis Budget reaffirmed its forecast for revenues to increase to $7.3 billion (£4.5 billion) for 2012, which represents a 24 per cent increase compared with 2011.