Avis Rental Car company buying Zipcar

Avis Rent A Car is purchasing the popular car-sharing service Zipcar for $500 million, the companies announced Wednesday.

The Parsippany, N.J.-based Avis, which also owns Budget Rent A Car, is buying Zipcar for $12.25 per share, pending the approval of the car-sharing service's stockholders. Zipcar, which is based in Cambridge, Mass., is popular in densely populated areas like Washington, D.C. because of its hourly pre-paid car rentals.

Avis said the merger would allow it to add the car-sharing genre to its traditional rentals.

"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," Avis Budget CEO Ronald Nelson said in a statement announcing the purchase. 

"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," Nelson continued. "We expect to apply Avis Budget's experience and efficiencies of fleet management with Zipcar's proven, customer-friendly technology to accelerate the growth of the Zipcar brand and to provide more options for Zipsters in more places. We also expect to leverage Zipcar's technology to expand mobility solutions under the Avis and Budget brands."

Zipcar CEO Scott Griffith added that the merger with Avis would be "a win across the board for our members, shareholders and employees.
 
"We will be well positioned to accelerate enhancements to the Zipcar member experience with more offers and additional services as well as an expanded network of locations," Griffith said.

The companies said Zipcar will operate as a subsidiary of Avis. Griffith  promised that the car-sharing service would retain the characteristics that have led to its popularity.

"As the leading global provider of car sharing services, with a brand that is synonymous with the category, we remain committed to the values and vision that have driven us forward for many years, grounded by our passion for delivering a superior experience to every member for every trip, every day," he said. "By combining Zipcar's expertise in on-demand mobility with Avis Budget Group's expertise in global fleet operations and vast global network, we will be able to accelerate the revolution we began in personal mobility."

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