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FTC reaches settlement with Hertz over Dollar Thrifty acquisition

After years of wrangling, including a bidding war against arch-rival Avis, Hertz Global Holdings has finally won the right to acquire Dollar Thrifty Automotive Group, the parent of the Dollar and Thrifty rental brands—but not all of it, according to the Federal Trade Commission.

The FTC said it has reached a proposed settlement with Hertz that will allow the acquisition to go forward, if Hertz sells off some assets.

Specifically, Hertz must sell its Advantage Rent a Car unit—something it had already planned to do—as well as 29 existing Dollar Thrifty on-airport locations. The FTC said the deal as originally proposed by Hertz “would have harmed competition at 72 airports around the United States, by reducing the number of competitors, diminishing future competition, and enabling the combined firm to raise rental car prices for consumers.”

The FTC noted that Hertz already has a deal to sell Advantage and 16 Dollar Thrifty airport locations to Franchise Services of North America (FSNA) and Macquarie Capital (USA). FSNA has its own rental car business called U-Save. “In addition, Hertz will sell another 13 Dollar Thrifty on-airport locations to FSNA/Macquarie or another FTC-approved buyer after the deal closes,” the FTC said in a statement.

The agency did not identify the specific airports where Hertz will have to divest Dollar Thrifty locations. It did note, however, that by reducing the number of major rental car competitors from four to three, the original deal would have eliminated head-to-head competition between Hertz and Dollar Thrifty at large airports like Baltimore-Washington, Chicago O'Hare and New York JFK.

Once the deal goes through, the three big rental competitors will be Hertz, with the Hertz and Dollar Thrifty brands; Avis Budget group; and Enterprise Holdings, which controls Enterprise, National and Alamo. Hertz has a domestic rental fleet of 335,000 vehicles with 26 percent of airport market share, while Dollar Thrifty has 107,000 vehicles and a 12 percent market share at airports, the FTC said.

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