Avis Budget to pay £636m for Avis Europe
Care hire company Avis Budget has agreed to buy its European counterpart Avis Europe for £636m in cash to create a group with revenues of $7bn (£4.3bn).
The 315p-per-share offer is at a 60 per cent premium to Avis Europe’s share price at yesterday’s close and will reunite the two companies after 25 years.
The deal will give Avis Budget a presence in 150 countries and operations in high growth markets including India and China. It should also bring cost synergies worth $30m or more per year, the company said.
“This transaction represents an outstanding opportunity for Avis Budget, and the acquisition of a business that we have long sought to own,” said Avis Budget chairman Ronald Nelson.
“The transaction re-unites the global operation of the Avis and Budget brands under one corporate umbrella, and is both financially and strategically compelling.”
Avis Budget will fund the deal through an equity placement of up to $250m as well as its own resources and a debt facility.
The proposed deal will be put to Avis Europe shareholders on or around 29 July.
Morgan Stanley and Citi are advising Avis Budget while Barclays Capital is advising Avis Europe.