Avis Budget is entering the fast-growing US car-sharing market with a $500m deal to acquire Zipcar.

The deal, expected to be finalised in the spring, will add to Avis’s earnings, excluding items, from the second year and is expected to generate between $50 million and $70 million in annual synergies.

Avis said it expects to fund the transaction primarily with available cash and additional debt.

Chief executive Ronald Nelson said: “We see car sharing as highly complementary to traditional car rental, with rapid growth potential and representing a scalable opportunity for us as a combined company,”

Rising fuel prices have driven demand for car sharing, attracting car rental companies in the US.