Avis buys Zipcar

[plunk10]

I can't imagine this will do any good for the consumer in the long run...

http://money.cnn.com/2013/01/02/news...html?hpt=hp_t2

It might be easier to get a Zipcar rental on weekends now that the popular urban car-sharing service is being acquired by traditional car rental company Avis Budget Group.

The companies said Wednesday that Avis (CAR, Fortune 500) has agreed to buy Zipcar (ZIP) for about $500 million, or $12.25 per share in cash, which is nearly 50% above the closing price of Monday.

Zipcar's stock surged in premarket trading to match Avis' valuation.

Avis said that it plans to use its fleet of rental cars to beef up Zipcar for its weekend demand, "which is currently constrained by fleet availability."

As a "car sharing" company, Zipcar operates under a slightly different model, appealing to customers who would rather rent a car by the hour, instead of by the day, though it offers services for both. Avis and Budget offer rentals on a daily or weekly basis.

The deal requires final approval from Zipcar shareholders. Avis and Zipcar expect the deal to be completed in the spring.

Citigroup (C, Fortune 500) is the financial adviser for Avis. Morgan Stanley (MS, Fortune 500) is the financial adviser to Zipcar.

* Registered users of the site do not see these ads.

[shikataganai]

I'm glad to see Zipcar winning the game, in that its continued existence is now assured.

[Ysidro]

Now that Avis bought zipcars, I will assume there will be more GM cars available for sharing perhaps? Camaro, mustang,Corvette... Or just my wishful thinking.

[rob1n1]

Originally Posted by Ysidro

Now that Avis bought zipcars, I will assume there will be more GM cars available for sharing perhaps? Camaro, mustang,Corvette... Or just my wishful thinking.

Malibu, Cruze, and Aveo, more like. Sorry...

[KC]

Originally Posted by shikataganai

I'm glad to see Zipcar winning the game, in that its continued existence is now assured.

Or, Avis strips Zipcar of available cars when the local Avis agent runs out...

--kC

[V8Slayer]

Originally Posted by KC

Or, Avis strips Zipcar of available cars when the local Avis agent runs out...

--kC

^ This. This is exactly what happened after Enterprise bought out National/Alamo back in 2009.

[shikataganai]

Originally Posted by KC

Or, Avis strips Zipcar of available cars when the local Avis agent runs out...

--kC

Per my experience and several articles, their usage patterns are complementary. Zipcar sees more weekend usage. Traditional rental cars see more business related M-F rentals.

[Indocti Discant]

Pretty much. Highly unlikely that Avis is going to shut down the independent zip car locations (of which there are several) dotted all over the areas it services.

If anything I think what might happen is that Avis starts offering zipcars at their locations and if long term zipcars are available Avis will show them as available for daily rentals.