Regulators approve $2.3 billion deal for Hertz to buy Dollar Thrifty

The Federal Trade Commission required Hertz Global Holdings Inc. to sell off assets in order to close its long-awaited acquisition of Tulsa-based Dollar Thrifty Automotive Group.
BY DON MECOY dmecoy@opubco.com Published: November 16, 2012
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The Federal Trade Commission said the current deal as originally structured would have reduced competition at 72 airports, enabling the combined firm to hike rental car prices in those locations.

Hertz last year earned about $3.3 billion in U.S. car rental revenues from airport transactions — about 26 percent of the national market share. Dollar Thrifty earned about $1.4 billion in U.S. car rental revenues last year, with roughly 90 percent of that generated by airport locations. Dollar Thrifty's national market share of airport car rentals is about 12 percent.

Those firms, along with Avis Budget Group and Enterprise Holdings Inc., control about 98 percent of U.S. airport car rentals.

“American consumers rent more than 50 million vehicles at airports nationwide each year, spending $11 billion, so this is a real pocketbook issue for everyday people,” FTC Chairman Jon Leibowitz said. “Today's bipartisan action by the FTC will ensure that consumers are not forced to pay higher prices for rental cars when they travel.”

Hertz will sell its Advantage Rent A Car business and 16 Dollar Thrifty on-airport locations where Advantage does not operate to Franchise Services of North America Inc. and Macquarie Capital Inc. Hertz will sell another 13 Dollar Thrifty on-airport locations to a buyer approved by the Federal Trade Commission after the deal closes.

The dissenting vote on the five-member commission, J. Thomas Rosch, said he opposed the settlement because he thought it didn't go far enough.

“I would have instead voted to challenge the transaction because of the significant risk of post-merger coordinated interaction among the remaining competitors,” Rosch said in a statement issued by the FTC.



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