The deal will give Avis the right to use the Budget trademark and name throughout Europe, the Middle East and Africa. It is subject to approval by the US courts and also from administrators in France.
As well as paying more than £12 million cash, Avis is also paying a further £2.1 million to keep Budget running until the deal is concluded, which is expected to be by the end of February. A further amount will be paid for the French operation although this has yet to be finalised.
Avis plans to run Budget as a separate brand, supplying car rental for the budget-focused traveller.