It's an excellent, opportunistic move by Branson to make a bid the same week the very complacent car rental companies announced plans to boost rates on corporate customers.
Hertz believes the company has assembled all the big pieces it needs. That includes buying Dollar Thrifty to attack the mid-tier market, and a slew of car-sharing technology acquisitions. Now the company can focus on lubricating the customer experience to make it more fluid.
The merger of the business traveler car rental brand withe the leisure-weekend car rental brand will be keenly followed as the macro trends favor the merger of the two historically distinct markets.
Hertz cleared the two obstacles standing in the way of a merger this week, but regulations will keep the new company from forming a monopoly in the rental car industry.
Hertz’s tender offer for Dollar’s stock is set to expire today and may need to be extended to get the necessary number of shares, although both boards have already approved the merger.
Rental car companies’ ratings reach new highs with travelers that appreciate reasonable daily rates and the convenience of a shuttle van. Or maybe they just look good in comparison to the airlines.
Hertz has offered various concessions to snag its competitor, but the FTC’s fears transcend this one deal, which is serving as a prime example of the extreme consolidation of the rental car industry over the past decade.