Ford to sell Hertz for around USD 5.6 Billion
US based second largest automaker Ford has announced that they would be selling off their auto rental subsidiary, Hertz Corp., to a group of private equity firms for $5.6 billion. The company is expected to sell all their shares in the Hertz to the group composed of Clayton Dubilier & Rice, The Carlyle Group, and Merrill Lynch Global Private Equity.
The total deal is valued at around USD 15 billion and it includes the debts on the company. The deal is expected to be complete by the end of the year. The new chairperson of the group heading hertz would be George Tamke, a Clayton Dubilier & RicePartner. Hertz had already filed for an initial public offering with the U.S. Securities and Exchange Commission in June this year.
Ford on their part would be divesting its remaining ownership interest in Hertz after the IPO. The new owners of the company would have more funds to expand the business operations of Hertz and would be better placed at making it a challenge in its market. Their were several groups involved in the bidding process and in the end Clayton Dubilier & Rice, Carlyle, and Merrill managed to impress Ford for this deal.