Avis seals Budget deal

Avis Europe tightened its grip on the continental car hire market today by acquiring a chunk of rival Budget’s global operations.

The group is snapping up Budget’s assets in Europe, Africa, Asia and the Middle East for $20m (€18.7m).

The deal adds 56,000 cars to Avis’ fleet and takes its share of the European market up by 2% to 20%, building its lead over Europcar and Hertz.

It includes 90 Budget sites across the UK and a divisional headquarters in Hemel Hempstead, Hertfordshire employing 85 staff.

US-owned Budget fell into Chapter 11 Bankruptcy protection last July after being hit by the effects of the September 11 terror attacks and the US downturn.

Its operations in the US, Canada, Australia, New Zealand and Latin America were sold to US business Cendant two months ago.

Today’s deal gives Avis Europe the rights to use the Budget trademark and name throughout Europe, the Middle East and Africa.

The group will continue to operate Budget as a separate brand and take on its agreements with over 1,000 franchise partners.

Chief executive Mark McCafferty said: “Prime opportunities to buy a major brand and an established royalty stream at fair value do not come along everyday.”

He added: “There will be clear cost efficiencies from joint service support functions and the Budget brand is well positioned for the budget focused business and leisure traveller.”

Bracknell-based Avis Europe has also struggled to shake off the impact of the slowing global economy on the car hire market.

Last month, it reiterated an earlier warning that profits in 2002 would be “some 15% below” the level seen in 2001 despite a slight recovery in the leisure sector.

Today’s acquisition is still dependent on approval from the US Chapter 11 court and a separate agreement with Budget’s administrator in France.