Aviation lessor AerCap confirmed on 10 March in a filing to the US Securities and Exchange Committee (SEC) its proposed acquisition of GE’s aircraft leasing division GECAS (GE Capital Aviation Services).
The deal, valued at US$30 billion, is still subject to shareholder and regulatory approvals, and other customary closing conditions, but is expected to be closed by the last quarter of 2021.
Under the terms of the agreement, GE will get approximately $24 billion in cash, 111.5 million ordinary shares or 46 percent ownership of the combined company (valued at around $6 billion as of 9 March 2021), and $1 billion paid in AerCap notes and/or cash upon closing.
GE said it plans to use the proceeds to reduce debt by about $30 billion in a bid to become a “more focused, simpler, and stronger industrial company” and to “de-risk” the company, according to GE Chairman and CEO H. Lawrence Culp, Jr.
The company will transfer $34 billion of GECAS’ net assets, including its engine leasing and helicopter leasing businesses, as well as purchase obligations to AerCap. Some 400 staff will also be merged to AerCap upon completion of the transaction.
“The combined company will be one of aviation leasing’s leading franchises, bringing together complementary portfolios across aircraft, engines, and helicopters,” said GE in a statement.
The combined fleet of the two leasing firms will total 2,098 aircraft across around 200 airlines, Simply Flying reported, making it the largest lessor in the world, operating around 18 percent of the world’s leased fleet. Between the two, outstanding aircraft orders with manufacturers total 531 aircraft.
“AerCap and GECAS both have industry-leading teams, attractive portfolios, diversified customer bases, and order books of the most in-demand new technology assets,” said AerCap CEO Aengus Kelly.
“This combination will enhance our ability to provide innovative and attractive solutions for our customers and will strengthen our cash flows, earnings, and profitability.
“This business combination will also strengthen our longstanding partnership with GE Aviation, which we look forward to working with closely in the future,” he added.