Cendant Confirms Budget Buy

Cendant Thursday confirmed it will acquire a substantial portion of the assets of Budget Group, which filed for Chapter 11 bankruptcy last month. Cendant will take on Budget's locations in the U.S., Canada, Australia, New Zealand and Latin America, leaving Budget to seek a buyer for operations in Europe, the Middle East and Africa. Cendant will continue to operate Avis Car Rental, another of the car rental industry's top five brands.

Budget expects the close quarters with Avis won't dilute its brand, however, "A large portion of our market is local, and our airport business is over 50 percent leisure, so it's a nice blend," said Kimberly Mulchahey, vice president of corporate communication for Budget Rent a Car. "That along with our truck business keeps us in a different market segment." Cendant said it will combine overhead and administrative functions of the two brands and target "value-conscious travelers" via its online booking channels, while continuing to grow its core travel segment, said Cendant chairman, president and CEO Henry R. Siliverman in a statement.

The acquisition, costing Cendant $107.5 million in cash plus transaction expenses and some contracts, would maintain Budget as an independent brand. In return, Cendant assumes about $2.7 billion in vehicle-related debt. The transaction already has cleared with U.S. antitrust regulators but the company will require further approvals with regulators outside the U.S. and with bankruptcy court.