Avis buying Zipcar in deal worth nearly $500M

Avis buying Zipcar in deal worth nearly $500M

Credit: Getty Images

NEW YORK - JUNE 03: A Zipcar is seen in a Manhattan parking lot June 3, 2010 in New York City. The car sharing service that is used primarily in urban areas and colleges has filed for an initial public offering. (Photo by Mario Tama/Getty Images)

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Associated Press

Posted on January 2, 2013 at 6:02 AM

Updated Wednesday, Jan 2 at 8:30 AM

PARSIPPANY, N.J. (AP) — 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.

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