If you can't beat 'em, buy 'em. That 's exactly what car rental company Avis will do: it will buy Zipcar Inc for about $500 million and will become the No.1 player in the fast-growing U.S. car-sharing market.
Car sharing allows customers to rent cars at an hourly or daily rate and park in convenient reserved spots.
"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. The total market is projected to reach $10 billion over the next several years," Avis Chief Executive Ronald Nelson said on a conference call with analysts.
Zipcar, founded more than 10 years ago, made $4 million last year. It controls about 75 percent of the $400 million car-sharing industry in the United States. Zipcar's business is at least five times larger than Hertz's and Enterprise's car-sharing businesses. It has more than 760,000 members, or Zipsters, with a presence in 20 cities in the United States, Canada and Europe.
The deal will position Avis as the market leader in car-sharing services in the United States.
Zipcar will operate as a unit of Avis and Scott Griffith will remain the unit's chief.
Citigroup is advising Avis while Morgan Stanley is advising Zipcar on the transaction.
edited from Atlantic Wire and Reuters
