The Work

June 14, 2011 3:10 PM

Kirkland, Freshfields Advise on $1 Billion Avis Deal

Posted by Tom Huddleston Jr.

Avis Budget Group, the third-largest car rental company in the U.S., plans to acquire U.K.-based Avis Europe plc for $1 billion in cash, the companies announced on Tuesday.

Parsippany, N.J.-based Avis Budget agreed to pay about $5.16 a share for Avis Europe. The company-- which was spun off from Avis Budget in 1986, according to Forbes--operates the brand in more than 3,000 locations across 112 countries in Europe, Africa, the Middle East, and Asia.

Avis Budget is turning to Kirkland & Ellis once again as outside counsel after enlisting the firm's services in its stalled attempt to acquire rival Dollar Thrifty. Antitrust obstacles and a challenge from rival bidder Hertz held up Avis Budget's $1.8 billion offer for Dollar Thrifty, the country's fourth-largest rental car company. Avis trails Hertz and Enterprise in the U.S. car rental market. 

As previously noted, corporate partners David Fox and Daniel Wolf were leading Kirkland's team advising Avis Budget, and they are reprising those roles on the European deal. Joining them are London-based corporate partners Graham White and Daniel Oates, along with finance partner Neel Sachdev and New York-based finance partner Ashley Gregory. Michael Tucker is Avis Budget's general counsel.

Avis Europe engaged Freshfields Bruckhaus Deringer as counsel on the transaction, with London-based corporate partner Chris Brown leading the way. Employee benefits partner Jocelyn Mitchell advised Avis Europe on such issues as share schemes, options, and awards; and partner Alex Potter served as competition counsel.

Last June, the firm also advised Avis Europe on a $254 million rights issue and an associated $543 million refinancing.

The deal, which is expected to close in October, is subject to shareholder and regulatory approval. Avis Budget says the deal already received backing from Avis Europe's board and from D'leteren, Avis Europe's majority shareholder with a 60 percent stake, according to the announcement.

Avis Budget expects to cut costs of more than $30 million a year as a result of the deal. The combined company would have annual sales of roughly $7 billion, with operations in more than 150 countries.

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