After days of speculation, it has now been officially confirmed that Irish aircraft lessor AerCap has finalised a $30 billion deal to purchase the leasing unit of engine-maker General Electric, GECAS.
The deal will see the world’s two biggest aircraft leasing bodies combine to create a new financing giant that will control over 2,000 plane leases worldwide.
GECAS is the biggest remaining piece of GE Capital, a lending operation that rivalled the biggest US banks but nearly sank the company during the 2008 financial crisis.
The sale to AerCap serves as the latest move in a string of decisions by the industrial conglomerate to restructure its once-sprawling operations.
The deal is expected to take nine to 12 months to close and will see GE take a 46 per cent stake in the newly combined company, and generate around $24 billion in cash.
From then, GE Capital will be folded into the larger corporate structure, no longer broken out as a separate unit in financial reports.
GE’s chief executive Larry Culp said the move will help GE become better capitalised, in line with peers.
″This is the right time to further accelerate our transformation,” Culp said .
“This action will enable us to significantly de-risk GE and continue on our path to being a well-capitalised company.”
Meanwhile, AerCap CEO Aengus Kelly stated the Irish company had snagged the deal at an “attractive” discount.
Analysts expect the newly merged lessor could now have a lot of sway in the market due to their significant size in relation to competitors.
“They will have a lot of negotiating power,” said Eric Bernardini, co-head of the aerospace, defense and aviation practice at consulting firm AlixPartners.
