Hertz buying Dollar Thrifty for $1.2 billion

LONDON (CNNMoney.com)

Hertz is buying Dollar Thrifty in a $1.2 billion deal that combines two of the most prominent players in the car rental business.

Hertz Global Holdings (HTZ, Fortune 500) said late Sunday that it has agreed to buy its rival for $41 a share in cash and stock.

The $41 a share purchase price represents just a 5.5% premium over Dollar Thrifty Automotive Group's (DTG) Friday closing price of $38.85 a share.

But it represents about a 19% premium to the 30-day average price of Dollar Thrifty stock.

The deal is structured as 80% cash and 20% stock, and Hertz plans to keep the Dollar and Thrifty brands.

Hertz CEO Mark Frissora said in a statement that Dollar Thrifty was an "excellent strategic fit" and that the addition of its network will help Hertz extend its foothold in Europe and other international markets.