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Ford completes sale of Hertz rental car division

Ford Motor Co. said Wednesday it has completed the sale of its Hertz Corp. rental car unit to a group of investors.
/ Source: The Associated Press

Ford Motor Co. said Wednesday it has completed the sale of its Hertz Corp. rental car unit to a group of investors.

Ford will get $5.6 billion in cash from the deal, which was announced in September. The investor group, which is made up of the private equity firms Clayton Dubilier & Rice, The Carlyle Group and Merrill Lynch Global Private Equity, also is assuming $10 billion in debt.

Hertz is the largest general-use car rental business in the world and one of the largest industrial, construction and material handling equipment rental businesses in North America. It has been a solid contributor to Ford's finances, with revenue of $6.7 billion and net income of $365.5 million in 2004.

Dearborn-based Ford, the nation's second-biggest automaker, has owned Hertz since 1994. The automaker first announced in April it was considering shedding Hertz to concentrate on its core automotive business.

The infusion of cash should help Ford, which has been struggling with falling U.S. market share, weak sport utility vehicle sales, growing U.S. health care costs and expensive labor agreements. Ford reported a third-quarter loss of $284 million, including a $1.2 billion loss in its North American operations.

Ford said will see a pretax gain of between $1.1 billion and $1.3 billion in the fourth quarter as a result of the Hertz sale.