Published on March 10th, 2021 | by Alan Dwyer0
AerCap to acquire GECAS
Following days of speculation, it has been confirmed that the Irish leasing company, AerCap has agreed to acquire 100% of GECAS. In a deal announced on Wednesday which has been unanimously approved by the boards of directors of AerCap and GE, GE will receive 111.5 million newly issued AerCap shares, $24 billion of cash and $1 billion of AerCap notes and/or cash. Upon completion of the transaction, GE is expected to own approximately 46% of the combined company and will be entitled to nominate two directors to the AerCap Board of Directors.
Citi and Goldman Sachs have provided AerCap with $24 billion of committed financing for the transaction. AerCap expects to maintain its current investment grade credit ratings with S&P, Moody’s and Fitch. The transaction will enhance many of AerCap’s key credit metrics, as the combined company will have stronger cash flows and a more diversified revenue and customer base.
The combined company will be an industry leader across all areas of aviation leasing, with over 2,000 owned and managed aircraft, over 900 owned and managed engines, over 300 owned helicopters and approximately 300 customers around the world.
Confirming the deal, Aengus Kelly, Chief Executive Officer of AerCap said, “We are excited about this opportunity to bring together two leaders in aviation leasing. AerCap and GECAS both have industry-leading teams, attractive portfolios, diversified customer bases and order books of the most in-demand new technology assets. This combination will enhance our ability to provide innovative and attractive solutions for our customers and will strengthen our cash flows, earnings and profitability. GECAS is a highly attractive business and this transaction continues our strong track record of capital allocation. As the recovery in air travel gathers pace, this transaction represents a unique opportunity that we believe will create long-term value for our investors. This business combination will also strengthen our longstanding partnership with GE Aviation, which we look forward to working with closely in the future.”
Also commenting was GE Chairman and CEO, H. Lawrence Culp, Jr. who said, “AerCap is the right partner for our exceptional GECAS team. Combining these complementary franchises will deliver strategic and financial value for both companies and their stakeholders. Together we’re creating an industry-leading aviation lessor with expertise, scale and reach to better serve customers around the world, while GE gains both cash and upside in the stronger combined company as the aviation industry recovers.”
The transaction is subject to approval by AerCap shareholders, receipt of necessary regulatory approvals and satisfaction of other customary closing conditions. The transaction is expected to close in the fourth quarter of 2021. The combined company will retain the name AerCap, and GECAS will become a business within AerCap.