Hertz Global Holdings Inc. is one step closer to its long-awaited prize.
More than two years after its original bid, it has agreed to buy Dollar Thrifty Automotive Group Inc. for about $2.3 billion, giving it more ways to attract travelers and expand its international presence. It will also give the company a leg up against an increasing number of smaller competitors.
At $87.50 per share, the deal is worth far more than any of Hertz's previous bids and about 8 percent higher than Dollar Thrifty's closing price Friday.
Nothing will change immediately for consumers. Travelers who rent through Dollar Thrifty will still visit that counter for service. In the long run, prices in many markets will almost certainly rise as the two companies streamline their operations.
Both rental companies have grown stronger and more valuable in the years since they first considered teaming up. Both stocks have almost doubled in value, and they've reported robust quarterly financial results as the volume of car rentals soared. But still-fierce competition has prevented the industry from raising prices, which has dragged on revenue. Fewer big competitors mean a better chance of higher rates.
In an interview Monday, Hertz chairman and chief executive Mark P. Frissora said this deal will help it fight against a growing number of small regional rental companies popping up in airports across the country. He said those competitors, along with European rivals like Germany's Sixt doing more U.S. business, will likely cause the rate wars to continue for now.
The deal still needs antitrust clearance from the Federal Trade Commission.
Hertz shares gained $1.06, or 8.06 percent, to close at $14.21 Monday. Dollar Thrifty shares rose $6.08, or 7.51 percent, to $87.08.
The push and pull between two of the nation's largest car rental companies started in 2010. Avis Budget Group was also in the mix, pursuing a bid for Dollar Thrifty for more than a year.