Hertz Global Holdings and Dollar Thrifty Automotive Group announced that they have entered into a definitive merger agreement under which Hertz would acquire Dollar Thrifty for $87.50 per share in cash in a transaction valued at a corporate enterprise value of approximately $2.3 billion.

Hertz also announced that it has reached an agreement to sell the Advantage business to Franchise Services of North America (FSNA) and Macquarie Capital. FSNA is a rental car operator with subsidiaries including, among others, U-Save, Rent-a-Wreck, Practicar and X Press Rent-a-Car. The closing of that divestiture is conditioned upon, among other things, Hertz completing an acquisition of Dollar Thrifty.

Lazard, Barclays, Bank of America Merrill Lynch and Deutsche Bank are acting as financial advisors to Hertz. Barclays, Bank of America Merrill Lynch and Deutsche Bank will provide financing for the transaction.

Cravath, Swaine & Moore, Debevoise & Plimpton and Jones Day are acting as legal advisors to Hertz. J.P. Morgan and Goldman Sachs are acting as financial advisors to Dollar Thrifty. Cleary Gottlieb Steen & Hamilton is acting as legal advisor to Dollar Thrifty.

The combination of Hertz and Dollar Thrifty will create a global, multi-brand rental car leader offering customers a full range of rental options through its strong premium and value brands. The boards of directors of both companies have unanimously approved the transaction.

Hertz chairman and chief executive officer, Mark P. Frissora said: “We are pleased to have finally reached an agreement with Dollar Thrifty after a lengthy – but worthwhile – pursuit. We have always believed that a combination with Dollar Thrifty is the best strategic option for both companies. The transaction provides Hertz instant scale with two new, well-established brands with airport concession infrastructure in the mid-tier value segment.”

To read the Hertz Global Holdings news release click here.