Ford Motor Company has agreed to sell car hire firm Hertz to a private investor group for $5.6bn, confirming a report in The Wall Street Journal last week.

The buyers are investment firms Clayton Dubilier & Rice and The Carlyle Group, with backing from Merrill Lynch Global Private Equity.

The deal to sell Hertz is subject to approval by regulators and is expected to be completed by the end of this year.

“This transaction reinforces our commitment to strengthening our balance sheet and investing in our core automotive business,” said Ford’s chief financial officer Don Leclair.

Clayton Dubilier & Rice’s George Tamke, who will be the new chairman of the board at Hertz, said the company’s strengths formed “a strong platform on which to pursue further growth initiatives”.

Representatives of the private equity group said they had no plans to sell any of Hertz’s assets or to cut jobs, although they would attempt to improve the firm’s efficiency.

Analysts said the deal highlighted the increasing influence that such groups now wield in the world of mergers and takeovers.

Hertz, founded in 1918, is the world’s biggest general-use car rental firm, with 7,400 offices in more than 150 countries.