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Avis Buys Zipcar

zipcarAvis Budget Group Inc. and Zipcar Inc. announced that Avis Budget Group has agreed to acquire Zipcar for $12.25 per share in cash, a 49 percent premium over the closing price on Dec. 31, representing a total transaction value of approximately $500 million.

The transaction is subject to approval by Zipcar shareholders and other customary closing conditions, and is expected to be completed in the spring. The boards of directors of both companies unanimously approved the transaction, and Zipcar shareholders representing approximately 32 percent of the outstanding common stock have agreed to vote their shares in support of the transaction.

Following the acquisition, Zipcar will operate as a subsidiary of Avis Budget Group and will continue with its planned move to new headquarters in Boston. Avis Budget anticipates that key members of the Zipcar management team will continue to set the overall direction and run day-to-day operations of Zipcar.

Avis Budget Group expects to fund the purchase price primarily with incremental corporate debt borrowings, as well as available cash. As of Sept. 30, Avis Budget Group had cash and marketable securities of approximately $554 million, and Zipcar had cash and marketable securities of approximately $82 million, or approximately $2 per Zipcar share.