Mergers: Hertz, Too, Becomes a No. 2

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In the rapidly growing and robustly competitive business of auto and truck rentals, Avis, Inc., makes much of the fact that it is only a hard-trying No. 2. Obviously, No. 1 is the Hertz Corp., with a rental fleet now totaling 125,000 vehicles. Hertz's familiar yellow signs are out in 98 countries, most recently including Finland, New Guinea and the Dominican Republic. Revenues this year will top $300 million.

Yet last week Hertz itself agreed to become a No. 2 of a sort. The rental firm's chairman, Leon C. Greenebaum, and Radio Corp. of America's chief executive, Elmer W. Engstrom, jointly announced that after an exchange of stock valued at $185 million, Hertz will become a wholly owned RCA subsidiary.

If the announcement was sudden, it was not exactly surprising. Hertz constantly needs vast amounts of money to purchase new vehicles and open new locations, particularly in foreign nations, where the idea of car rentals has caught on fast. The tight money market has put a damper on the company, forced it, in Greenebaum's words, to "pull back on some experimental work we've been doing in developing new markets." One pullback, for the time being: a market test in which Hertz had been making extra sports cars available to see how eagerly drivers with more funds and free time would rent them. Moreover, hard-striving Avis last spring pulled a march on its bigger competitor by accepting a takeover offer from International Telephone & Telegraph, which has the money and means to make Avis larger than it is now.

For its part, RCA generates a sizable cash flow in its television operations, has been looking for companies outside the electronic field that it can acquire to keep its cash working profitably.

The Hertz-RCA fusion will mean benefits for both companies. Hertz, with Greenebaum still in the driver's seat, will have more money to expand and keep its lead in the business. Meanwhile, having branched out from automobiles to leasing everything from construction cranes to hospital beds, Hertz may be able to help its new parent. RCA is coming on fast as a manufacturer of computers. But most customers are anxious to lease such equipment rather than to buy it. Hertz's longtime leasing experience will be handy.