Hertz to keep Tulsa presence after Dollar Thrifty acquisition
BY D.R. STEWART World Staff Writer
Wednesday, November 21, 2012
11/21/12 at 2:57 AM
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A day after its $2.3 billion acquisition of Tulsa's Dollar Thrifty Automotive Group Inc., Hertz Global Holdings Inc. executives said Tuesday the rental car operator will retain a presence in Tulsa after the companies are integrated.
Speaking to Dollar Thrifty employees at the company's corporate offices at 5310 E. 31st St., Hertz Chairman and CEO Mark Frissora thanked the Tulsa company's workers for their hard work that has made the company so successful.
Frissora's appearance was not open to the public, he declined interview requests and the company did not provide a statement of his remarks.
Hertz spokesman Richard Broome, however, said company executives made a commitment to Dollar Thrifty employees, 780 of whom work in Tulsa, that the Park Ridge, N.J., company would not abandon its Tulsa operations.
Hertz also has a regional operations center in Oklahoma City that employs 1,700 people. Hertz employs 24,000 workers companywide.
"We haven't figured out what the scale of the (Tulsa) presence will be," Broome said. "We will provide more details as we go through the integration process....We plan to make a decision in a 90-to-180-day time frame."
During the next several months, Hertz executives will evaluate Dollar Thrifty employees, operations and facilities against those of Hertz, eliminating duplicative functions.
"The process will be open and collaborative, and we will want the best people working for us, and we will operate from locations where we can optimize efficiency and attract the best talent," Broome said. "Whether an individual works for Hertz or Dollar Thrifty today will not be a consideration in the process."
Hertz expects the Dollar Thrifty acquisition will produce $160 million a year in cost synergies and sales growth opportunities, company executives said.
In a statement released by Hertz on Tuesday, Frissora said the Dollar Thrifty acquisition marks a new era for Hertz.
"In the 94-year history of Hertz, our employees and business partners have never been this excited," Frissora said. "Over the past six years, we have competed successfully with only one global premium brand in place while our competitors have had multiple brands to work against us. Starting today, we now have two additional, popular brands to compete across multiple market segments, with plans to offer them to our many partners and customers.
"That's why we are pleased to announce that the transaction is complete, and we look forward to working expeditiously with Dollar Thrifty to integrate the strengths of our two great companies."
For 10 weeks after the proposed acquisition and merger was announced in August by the two companies, there was doubt the deal would be completed.
The Federal Trade Commission's antitrust review of the acquisition extended well beyond its anticipated approval in mid-October, Hertz executives said.
In documents filed with the Securities and Exchange Commission, Hertz said the FTC's antitrust concerns weren't eliminated with Hertz's commitment to divest its Advantage discount rental car brand.
The FTC identified 29 on-airport rental car locations served by Dollar Thrifty where it believed competition would be enhanced by the on-airport addition of Advantage or another leisure car rental brand, SEC documents show.
Based upon discussions with the FTC staff, Hertz concluded it would receive antitrust clearance of the Dollar Thrifty acquisition by divesting Advantage and 16 on-airport rental car operations, SEC filings say.
During the FTC review, Hertz secured on-airport concessions for Advantage at three of the 16 on-airport locations, Hertz said in government documents.
"In the final days leading up to the FTC agreement, it became clear that, to avoid litigation and the associated delay, Hertz would need to divest additional on-airport locations if FTC approval was to be secured prior to the Nov. 16 expiration of Hertz's offer to purchase Dollar Thrifty shares," Hertz said in its SEC filing. "Hertz ultimately agreed to include in the divestiture package the airport concession agreements for the 13 secondary airport locations, together with certain associated joint use and/or service agreements."
Hertz has agreed to divest Advantage by Dec. 12 and to divest the initial 13 on-airport locations within 90 days, SEC filings show.
Hertz also agreed to divest 10 of the 13 remaining on-airport rental car operations within six months, and to divest the other three locations within nine months, government filings say.
At the majority of the airports where Hertz will divest Dollar Thrifty operations, Hertz expects to continue operating on-airport with either or both of the Dollar and Thrifty brands after providing the divestiture buyer with a rental car counter, the company said.
"In some instances, one or both brands may be required to move off-airport in order to free up a slot," Hertz said in its SEC filing. "When that occurs, however, Hertz generally will continue to operate the Dollar and/or Thrifty brands from nearby, serving airport customers from an off-airport location. Eventually, Hertz will be able to bid for new on-airport concessions for the brand(s)."
Neither Hertz nor the FTC has identified the on-airport locations the FTC is requiring Hertz to divest.
Hertz shares closed Tuesday at $14.72, down 7 cents.
Original Print Headline: Hertz to keep Tulsa presence
D.R. Stewart 918-581-8451