The world’s largest aircraft leasing company, AerCap, has bought the aircraft leasing business of General Electric, a deal worth more than $30 billion.
The deal includes about $24 billion in cash, $1 billion paid in AerCap notes or cash, and 111 million new shares, which gives GE a stake of 46% in the AerCap-controlled company.
The deal includes the transfer of about 300 helicopters and is expected to close in the fourth quarter of 2021. The two companies together control more than 2,000 jets, dwarfing rivals.
Citi and Goldman Sachs have already provided AerCap with $24 billion of committed financing for the transaction.
The move seeks to help GE reduce debt and focus on its industrial core of power, renewable energy, aviation and healthcare. It will also help GE become better capitalised and derisk its balance sheet, opening up an array of capital allocation options, including share buybacks and higher dividends.
According to GE, it plans to reduce debt by about $30 billion this year using transaction proceeds and existing cash but announced a $3 billion writedown in connection with the deal.
AerCap is the world’s largest aircraft leasing company, with its headquarters in Dublin. As of June 2020, it had 1,035 owned, managed aircraft in its portfolio. It serves over 200 customers in approximately 80 countries with comprehensive fleet services. It is listed on the New York Stock Exchange.
In December 2013, the company bought International Lease Finance Corporation (ILFC) for around $5.4 billion, $3 billion of which was paid by cash and the rest with newly issued AerCap common shares. The deal gave the company $43 billion in total assets and a fleet of over 1,300 aircraft, compared to GE’s fleet of 1,800+ aircraft.
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