Fleet News

One million vehicle fleet on cards as Avis buys Cendant for £1.1bn

AVIS Rent A Car Inc is to buy Cendant Business Answers (Europe), parent of PHH Vehicle Management, for £1.1billion in a deal that will create a one-million-vehicle fleet.

The take-over forms part of a major re-organisation of American-owned Cendant Corporation which also involves the sale of roadside assistance and recovery organisation Green Flag International car rental giant Avis outbid several companies in the auction for PHH, and expects to conclude the deal by June 30.

The deal will link its 205,000-strong worldwide fleet to PHH's 700,000-vehicle global fleet, establishing a rival to GE Capital Fleet Service's one million vehicles - the world's largest corporately-owned fleet. Financially troubled Cendant Corporation will use the $1.44billion cash generated through the disposal of its fleet businesses to reduce its outstanding debt and improve its debt-to-equity ratio.

Cendant will also receive $360million in Avis stock, increasing its shareholding in Avis from 19% to 34%. Cendant originally owned Avis Rent A Car before floating the company on the US stock exchange in 1997 and it continues to own the master franchise rights to the Avis brand name.

Cendant bought PHH Corporation for $1.7billion in 1996 and will retain PHH's mortgage and relocation businesses. It claims it will make an after-tax gain of $750million by selling PHH's fleet business, which in Europe falls under the umbrella of Cendant Business Answers.

This covers PHH's contract hire, fuel card and fleet management operations, accident management company Cendant Claims Plus, corporate purchasing card company Cendant Business Partners, and third-party fleet management company Overdrive Business Solutions.

Leave a comment for your chance to win £20 of John Lewis vouchers.

Every issue of Fleet News the editor picks his favourite comment from the past two weeks – get involved for your chance to appear in print and win!

Login to comment


No comments have been made yet.

Compare costs of your company cars

Looking to acquire new vehicles? Check how much they'll cost to run with our Car Running Cost calculator.

What is your BIK car tax liability?

The Fleet News car tax calculator lets you work out tax costs for both employer and employee