Zipcar bought by Avis for $491.2 million

      Avis is set to buy Zipcar for nearly $500 million. Photo: Heather Farrell

      PARSIPPANY, N.J. (AP) - Avis is buying Zipcar for $491.2 million, expanding its offerings from traditional car rentals to car sharing services.

      Avis Budget Group Inc. will pay $12.25 per share, which is a 49 percent premium to the company's Friday closing price. The companies put the total value of the deal at approximately $500 million.

      Zipcar Inc. has about 40.1 million outstanding shares, according to FactSet. It will become an Avis subsidiary and have headquarters in Boston. Shares jumped more than 6 percent in premarket trading Monday.

      The boards of both companies unanimously approved the buyout.

      Avis, based in Parsippany, N.J., anticipates $50 million to $70 million in annual savings.

      If Zipcar shareholders approve the deal, it's expected to close in the spring.

      Zipcars live in over 50 cities across the United States and the UK.