(Bloomberg) -- Avis Budget Group Inc. agreed to buy U.S. car-sharing company Zipcar Inc. for $491 million, targeting consumers looking for an alternative to owning their own auto.
Zipcar's board agreed to a bid of $12.25 a share, Avis Budget's said today in a statement.
The offer, which has been accepted by holders of 32 percent of Zipcar's shares, is 48 percent higher than the Cambridge, Massachusetts-based company's Wednesday closing price of $12.18 in Nasdaq trading. The shares rose $3.94 in trading Wednesday.
"By combining with Zipcar, we will significantly increase our growth potential, both in the U.S. and internationally, and will position our company to better serve a greater variety of consumer and commercial transportation needs," Ronald L. Nelson, Avis Budget chief executive officer, said in the statement.
The acquisition marks a shift in strategy for Avis Budget to shorter-term rental offerings after it lost out last year to Hertz Global Holdings Inc. in a race to buy competitor Dollar Thrifty Automotive Group.
Avis Budget expects the deal to generate earnings improvements of $50 million to $70 million annually through savings on procuring and managing vehicles, it said today.
The rental company forecasts the purchase will add to earnings in the second year after completion, which it expects in the first few months of 2013.
Zipcar, founded in 2000, has more than 760,000 members and is active in 20 cities in the United States, Canada and Europe, the companies said today.
Zipcar will proceed with plans to shift its headquarters to Boston, they said.
--Editors: Tom Lavell, Christopher Jasper
To contact the reporter on this story: Chris Reiter in Berlin at [email protected]
To contact the editor responsible for this story: Chad Thomas at [email protected]