AerCap Holdings to Buy GE Capital Aviation Services
Posted on 03/10/2021
AerCap Holdings N.V. (NYSE: AER), a major company in the aircraft leasing space entered into a definitive agreement with General Electric (NYSE:GE) under which AerCap will acquire 100% of GE Capital Aviation Services (“GECAS”), a GE business.
The combined company will have over 2,000 owned and managed aircraft, over 900 owned and managed engines, over 300 owned helicopters and approximately 300 customers around the world. The deal between Ireland’s AerCap and GECAS would create the largest buyer of Airbus and Boeing planes.
Under the terms of the agreement, which has been unanimously approved by the boards of directors of AerCap and GE, GE will receive 111.5 million newly issued AerCap shares, US$ 24 billion of cash and US$ 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.
GE will transfer US$ 34 billion of GECAS’ net assets, including its engine leasing and Milestone helicopter leasing businesses, to AerCap. Current GECAS purchase obligations will transfer to AerCap, and GECAS’ more than 400 employees also will transfer to AerCap upon completion of the transaction.
Citi and Goldman Sachs have provided AerCap with US$ 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 Ratings.
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 of AerCap.
GE claims the transaction simplifies GE and focuses it on its industrial core—Power, Renewable Energy, Aviation, and Healthcare—while significantly reducing GE Capital assets and generating proceeds to further de-risk and de-lever.
Advisors
Citi and Morgan Stanley acted as financial advisors to AerCap. Cravath, Swaine & Moore LLP, NautaDutilh NV and McCann Fitzgerald acted as legal advisors to AerCap.
PJT Partners LP, Goldman Sachs, and Evercore acted as financial advisors, and Paul, Weiss, Rifkind, Wharton & Garrison LLP, Clifford Chance LLP, and A&L Goodbody acted as legal advisors to GE on the transaction.