Bob P
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From the New York Times
By ANDREW ROSS SORKIN
Published: February 14, 2007
A deal to combine four of the nations largest car rental brands National, Alamo, Thrifty and Dollar is being discussed as the industry continues to consolidate.
Dollar Thrifty Automotive Group, a unit of DaimlerChrysler, is in early talks to merge with Vanguard Car Rental, of Tulsa, Okla., which owns National and Alamo, in a deal valued at more than $3 billion, according to people involved in the discussions.
The negotiations, which have been taking place on and off for several months, are at a particularly delicate stage, these people said, and may still collapse.
If completed, a deal would create the third-largest rental car company in the United States behind leaders Enterprise Rent-a-Car and Hertz Global Holdings, but outpacing Avis Budget Group in terms of revenue.
A deal could push rental car rates higher. Prices have already risen 10 percent to 20 percent in the last year as the Detroit automakers have tried to move away from providing discounted fleet vehicles to rental car companies and focus on higher-margin retail customers.
The average rental price of a midsize car has risen to about $57 a day this year, from $52 last year, according to Neil Abrams, president of Abrams Consulting Group in Purchase, N.Y., which follows the rental car business. A merger would make sense, he said, noting that margins are flat. A combined company could probably squeeze millions of dollars in savings by eliminating back offices while continuing to operate all four brands as a way to segment the market.
The only question, Mr. Abrams added, is whether they are both chasing after the same customer.
And a deal would face antitrust scrutiny from regulators.
Fred Fleischner, a spokesman for Dollar Thrifty, declined to comment, citing the companys policy not to comment on rumors.
J. J. Rissi, a spokeswoman for Cerberus Capital Management, which owns Vanguard, also declined to comment.
A merger would be the latest in a flurry of deals in the car rental business. Hertz was bought from Ford Motor in December 2005 by a consortium of private equity firms. In November, Hertz went public at $15 a share. (It closed yesterday at $20.36.) Avis Budget Group was recently spun off in the breakup of the Cendant Corporation.
By ANDREW ROSS SORKIN
Published: February 14, 2007
A deal to combine four of the nations largest car rental brands National, Alamo, Thrifty and Dollar is being discussed as the industry continues to consolidate.
Dollar Thrifty Automotive Group, a unit of DaimlerChrysler, is in early talks to merge with Vanguard Car Rental, of Tulsa, Okla., which owns National and Alamo, in a deal valued at more than $3 billion, according to people involved in the discussions.
The negotiations, which have been taking place on and off for several months, are at a particularly delicate stage, these people said, and may still collapse.
If completed, a deal would create the third-largest rental car company in the United States behind leaders Enterprise Rent-a-Car and Hertz Global Holdings, but outpacing Avis Budget Group in terms of revenue.
A deal could push rental car rates higher. Prices have already risen 10 percent to 20 percent in the last year as the Detroit automakers have tried to move away from providing discounted fleet vehicles to rental car companies and focus on higher-margin retail customers.
The average rental price of a midsize car has risen to about $57 a day this year, from $52 last year, according to Neil Abrams, president of Abrams Consulting Group in Purchase, N.Y., which follows the rental car business. A merger would make sense, he said, noting that margins are flat. A combined company could probably squeeze millions of dollars in savings by eliminating back offices while continuing to operate all four brands as a way to segment the market.
The only question, Mr. Abrams added, is whether they are both chasing after the same customer.
And a deal would face antitrust scrutiny from regulators.
Fred Fleischner, a spokesman for Dollar Thrifty, declined to comment, citing the companys policy not to comment on rumors.
J. J. Rissi, a spokeswoman for Cerberus Capital Management, which owns Vanguard, also declined to comment.
A merger would be the latest in a flurry of deals in the car rental business. Hertz was bought from Ford Motor in December 2005 by a consortium of private equity firms. In November, Hertz went public at $15 a share. (It closed yesterday at $20.36.) Avis Budget Group was recently spun off in the breakup of the Cendant Corporation.
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