Avis buying Zipcar in deal worth nearly $500M

6:53 AM, Jan 2, 2013   |    comments
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PARSIPPANY, N.J. - Avis is buying Zipcar for $491.2 million, expanding its offerings from traditional car rentals to car sharing services.

Avis Budget Group Inc. will pay $12.25 per share, which is a 49 percent premium to the company's Friday closing price. The companies put the total value of the deal at approximately $500 million.

Zipcar Inc. has about 40.1 million outstanding shares, according to FactSet. It will become an Avis subsidiary and have headquarters in Boston. Shares jumped more than 6 percent in premarket trading Monday.

The boards of both companies unanimously approved the buyout.

Avis, based in Parsippany, N.J., anticipates $50 million to $70 million in annual savings.

If Zipcar shareholders approve the deal, it's expected to close in the spring.

(Copyright 2013 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.)

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