Avis, the third-biggest U.S. car-rental company, acquired car-sharing company Zipcar Inc. for about $500 million in March. The company is seeking to compete in a consolidating industry where rival Hertz Global Holdings Inc. received final regulatory approval last week of its $2.3 billion acquisition of Dollar Thrifty Automotive Group, solidifying Hertz's position as theNo. 2 player.
"Payless expands our global footprint, enables us to support Budget's mid-tier brand positioning, and gives us greater flexibility to capitalize on opportunities in an additional segment of the car rental market in order to help accelerate our growth," Avis Budget CEO Ron Nelson said in the statement.
Avis Budget, based in Parsippany, N.J., plans to operate Payless as a separate brand, according to the statement. The company said it expects "significant" cost savings from the transaction, including from reduced fleet interest expense.
Closely held Enterprise Holdings Inc., based in St. Louis, is the largest U.S. car-rental company.