Hertz has been ordered to make disposals by the US competition authority in order to win clearance for its $2.3 billion takeover of rival Dollar Thifty.
The car rental giant must sell its Advantage Rent A Car business as well as the rights to operate 29 Dollar Thrifty on-airport locations around the US.
The US Federal Trade Commission said the proposed settlement would resolve charges that Hertz’s acquisition of Dollar Thrifty would be anti-competitive.
Hertz has agreed to sell Advantage as well as 16 Dollar Thrifty on-airport locations where Advantage does not yet operate to U-Save rental owner Franchise Services of North America and Macquarie Capital.
Hertz will also sell another 13 Dollar Thrifty on-airport locations to FSNA/Macquarie or another FTC-approved buyer after the deal closes.
FTC chairman Jon Leibowitz said: “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.
“Today’s bipartisan action by the FTC will ensure that consumers are not forced to pay higher prices for rental cars when they travel.”
The FTC claimed that the original deal would have harmed competition at 72 US airports by reducing the number of competitors, diminishing future competition, and enabling the combined firm to raise rental car prices for consumers.
Hertz maintains a peak domestic car rental fleet of approximately 355,000 vehicles and employs about 16,400 people in the US.
It earned about $3.3 billion in US car rental revenues from transactions at airport locations. The company holds a 26% market share of all airport car rentals.
Dollar Thrifty has an average fleet of 107,000 vehicles and has 5,900 US staff and an airport rental market share of 12%.
It earned $1.4 billion in U.S. car rental revenues last year, with about 90% coming from airport locations.
Hertz chairman and chief executive Mark Frissora said: “We have reached a compelling agreement with the FTC and are pleased to finally move forward as one company.
“We have always believed that a combination with Dollar Thrifty is the best strategic option for both companies, and we look forward to becoming a stronger global competitive player in the industry.
“We are confident that the employees, customers and shareholders of both companies will benefit from the value this combination will create.”