Hertz is close to reaching a deal to buy Dollar Thrifty for about $2.5 billion (£1.6bn), according to the news agency Reuters.
Sources close to negotiations asked not to be named as the talks are private.
Both Hertz and its competitor Avis Budget Group has been eyeing up budget car rental giant Dollar Thrifty for several years but negotiations have stalled due to price haggling and regulatory issues.
However, a merger between Hertz and Dollar Thrifty may be permitted if Hertz succeeds in off-loading its Advantage budget brand to satisy U.S. anti-trust concerns.
