Car rental company Avis Budget Group said it will buy Zipcar for about $500 million in cash to enter the fast-growing U.S. car-sharing market.
The offer of $12.25 per share is at a premium of 49 percent to Zipcar's Monday close.
"We see car sharing as highly complementary to traditional car rental, with rapid growth potential and representing a scalable opportunity for us as a combined company," Ronald Nelson, Avis' chief executive, said in a statement.
Rising gasoline prices have driven demand for car sharing, attracting car rental companies. Enterprise Holdings, the largest U.S. car rental company, is also expanding aggressively in the car-sharing market.