Hertz Global Holdings Inc. announced today that it has successfully completed its previously announced acquisition of Dollar Thrifty Automotive Group Inc. As a result of the transaction, Dollar Thrifty has become a wholly owned subsidiary of Hertz.

Hertz Chairman and CEO Mark P. Frissora said: "In the 94-year history of Hertz, our employees and business partners have never been this excited. Over the past six years, we have competed successfully with only one global premium brand in place while our competitors have had multiple brands to work against us.

"Starting today, we now have two additional, popular brands to compete across multiple market segments, with plans to offer them to our many partners and customers. That's why we are pleased to announce that the transaction is complete, and we look forward to working expeditiously with Dollar Thrifty to integrate the strengths of our two great companies."

Hertz said it completed the tender offer and has purchased approximately 99.6% of the shares of Dollar Thrifty common stock, then outstanding at $87.50 per share in cash. Hertz acquired the remaining shares of Dollar Thrifty common stock by means of a short-form merger, in which such shares were converted into the right to receive the same $87.50 per share in cash that will be paid in the tender offer.

In order to accomplish the short-form merger, Hertz exercised its "top-up" option to purchase additional shares of Dollar Thrifty common stock directly from Dollar Thrifty. Dollar Thrifty's common stock will no longer be listed on the New York Stock Exchange.

Divesting Locations

On Nov. 15, Hertz announced the Federal Trade Commission (FTC) required that Hertz give up the rights to operate 29 Dollar Thrifty on-airport locations, as well as its Advantage Rent A Car brand — which was already part of the agreement.

However in today’s announcement, Hertz outlined in a PowerPoint that it expects to divest 26 locations that could be Dollar or Thrifty locations, or joint Dollar Thrifty concessions.

The presentation also outlines that 13 of those locations are “initial airport locations,” in which the company has the option to obtain new concessions for Advantage; subdivide an existing concession agreement to share counter space with Advantage; or transfer Dollar or Thrifty counter space to Advantage and then move the location off airport to eventually re-bid concessions when allowed by the FTC. Hertz has until Feb. 15, 2013 to divest these “initial airport locations.”

The remaining 13 locations are considered “secondary airport locations,” in which Hertz has the option to obtain new concessions for a new buyer; subdivide an existing concession agreement to share counter space with a new buyer; or transfer Dollar or Thrifty counter space to a new buyer, then move the displaced brands off airport to re-bid the concessions “asap.” Hertz will operate these locations until divested and has 60 days to market assets, according to the PowerPoint. After this point, an FTC-designated trustee has 12 months to divest the remaining assets.

Hertz said it “intends to continue operating any Dollar or Thrifty displaced brand off airport until we are able to bid on a new concession agreement on airport.”

The number of Advantage locations that will be divested in the U.S. amounts to 56, in which 35 of those are on-airport. The sale of Advantage to Adreca, a subsidiary of Macquarie Capital operated by Franchise Services of North America (FSNA), is scheduled to close on Dec. 12, 2012. As well, Hertz must not seek any other "secondary airport location" buyers other than Adreca for 30 days after the Dollar Thrifty acquisition.

In Europe, Advantage locations will be rebranded to Thrifty.

Hertz said that the Advantage divestiture amounts to about $30 million in EBITDA, and said it is “difficult to estimate potential revenue leakage of initial and secondary airport location divestitures.”

Over the last 12 months, combined corporate revenues globally for the Hertz and Dollar Thrifty brands — not including Advantage or Hertz Equipment Rental — would have amounted to $8.8 billion, and 2011 franchise revenues would have amounted to $4.4 billion, according to the Hertz presentation. The companies also would’ve had a combined fleet size of 733,000 units as of Sept. 30, 2012.

Also combined, the companies employ 32,500 people, according to Hertz.

You can see the PowerPoint presentation Hertz released today by clicking here. Hertz also posted an FAQ regarding the divestitures that can be found here, as well as a summary of the Advantage brand consent agreement that can be read here.

For an analysis from ARN Executive Editor Chris Brown, "FTC Ruling: What It Means," click here.

You can also read all past coverage of the merger here.