Hertz buys 20% stake in Warburg Pincus-backed China Auto Rental

Under the agreement, Hertz will also get a seat on CAR's board, and CAR will acquire all of Hertz's business in China and the two companies' rental locations in the country will be co-branded.

Hertz will also provide management and technology support to CAR. The companies will share customer information and service networks.

Mark Frissora, chairman and CEO of Hertz, said his company was attracted to the deal by CAR's impressive performance in recent years. Warburg Pincus invested $200 million in the company for a significant minority stake in July last year with a view to scaling up the company and consolidating its market position.

Hertz and CAR will be exclusive car rental partners for inbound and outbound business, offering international corporate and leisure travelers short and long term rental services.

In 2012, China's international travel expenditures exceeded $100 billion, its domestic rental business is expected to grow more than 15% annually through 2016.

CAR currently has the largest domestic rental footprint, with 700 locations in 66 cities, and a 50,000-vehicle fleet which is more than four times the size of its nearest competitor. CAR's 200% annual growth rate from 2009-2012 is six times higher than the market over the same period.

"I believe this alliance will further intensify CAR's shareholder strength and reinforce CAR's leading position in China's car rental industry. It will to a great extent enhance CAR's scale, branding, as well as products and services, which will bring customers at home and abroad a car rental experience of high quality and convenience," said Charles Lu , CAR chairman and CEO in a statement.

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• Topics
• Greater China
• Warburg Pincus Asia
• Growth capital
• China