The Avis Budget Group (Avis) announced it has agreed to purchase Zipcar, the car sharing network. Avis, a rental car company, has agreed to pay $500 million in cash. Avis Budget Group operates both Avis and Budget, providing numerous rental services through 10,000 locations in over 170 countries worldwide.

Avis expects this deal to generate anywhere between $50 million to $70 million in annual synergies. The company currently employs 29,000 employees and booked $7.3 billion in revenue for 2012.

 “By combining with Zipcar, we will significantly increase our growth potential, both in the United States and internationally, and will position our company to better serve a greater variety of consumer and commercial transportation needs. We see car sharing as highly complementary to traditional car rental, with rapid growth potential and representing a scalable opportunity for us as a combined company,” Ronald L. Nelson, Avis chairman and CEO, said.

Zipcar first made its way to the United States in 2001, but originated in Europe in 2000. Zipcar has a simple premise where members or non-members pay a small fee and are able to drive around in a Zipcar. Rates usually start at $8 an hour for non-members, and a 10 percent discount for members. 

As of November 2012, Zipcar has over 750,000 members with over 11,000 vehicles throughout North America, the UK, Spain and Austria. Zipcar offers customers 24/7 access to thousands of cars around the world, which come equipped with insurance that will vary depending on your age and which state you live in. Zipcar’s also come with a gas card when the vehicle is initially picked up, and offers 180 free miles with each reservation.

The acquisition is expected to be finalized in the spring of 2013 and Zipcar will still operate as a subsidiary of Avis Budget Group and will move forward with its plan to move its headquarters to Boston, Massachusetts.

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