Avis Budget Group has signed an agreement to acquire US based car sharing network Zipcar for $500m.
Following the expected completion of acquisition by spring of 2013, Zipcar will function under Avis while shifting its headquarters to Boston, Massachusetts.
Avis Budget Group chairman and chief executive officer Ronald Nelson said that the company sees car sharing as highly complementary to traditional car rental, with rapid growth potential and representing a scalable opportunity for us as a combined company.
"We also expect to leverage Zipcar's technology to expand mobility solutions under the Avis and Budget brands," Nelson added.
"Avis Budget's existing infrastructure, scale and experience with managing multiple brands make us uniquely positioned to accelerate the growth and profitability of Zipcar."
The company expects to obtain $50m to $70m profits per year through the acquisition, significant cost reductions for the fleet life cycle and plans to achieve substantial cost savings by increasing fleet utilization across the two companies.
