NEW YORK -- Cendant Corp. confirmed that it will acquire Budget
Group Inc. for $107.5 million in cash and will assume about $2.7
billion in vehicle-related debt.
Cendant, which already owns Avis, said it will acquire Budget's
operations in the U.S., Canada, Australia, New Zealand and Latin
America, but is seeking another buyer for Budget's operations in
Europe, the Middle East and Africa.
Cendant said it expects to complete the acquisition in the
fourth quarter.
Following the acquisition, Budget will continue to operate as a
separate and independent brand.
The transaction must still meet certain conditions, including
bankruptcy court and regulatory approval outside the U.S. The
transaction has received clearance under U.S antitrust
regulations.
"We believe that bringing Budget into our family of companies
provides numerous synergies with Cendant's existing lines of
business. Beyond the clear cost efficiencies of combining overhead
and administrative functions of Avis and Budget, adding the Budget
brand to our travel mix will allow us to reach value-conscious
travelers more effectively through our timeshare, travel services
and online booking channels," said Cendant chairman Henry
Silverman.
"This transaction is also consistent with our articulated
strategy of making add-on acquisitions in our core travel and
residential real estate segments," Silverman said.
Sandy Miller, chairman of Budget Group Inc., said, "As a
strategic buyer, Cendant will provide numerous resources to
strengthen and grow Budget's rental operations. In addition,
joining forces with Cendant will allow Budget to operate as an
independent brand, enjoy many synergies created by this transaction
and continue serving its customers in the same quality manner."
The two companies agreed to assemble a transition team comprised
of senior managers to "ensure a seamless integration of the
companies."
Cendant said it does not anticipate changes in Budget's
management or workforce.