AerCap will acquire GE Capital Aviation creating an industry leader across aviation leasing in aircraft, engines and helicopters. The combined company will have stronger revenues, cash flows, earnings and a more diversified customer base.
Today (March 10, 2021) AerCap Holdings N.V. (NYSE: AER) announced that they will acquire GE Capital Aviation Services (GECAS), creating an industry leader in all areas of aviation leasing including aircraft, engines and helicopters. The combined entity will have stronger cash flows, earnings and a more diversified customer base. After the acquisition, AerCap expects to maintain their current investment-grade rating, and the company will have a portfolio of over 2,000 owned and managed aircraft, more than 900 owned and managed engines, over 300 owned helicopters and approximately 300 global customers.
In Wednesday’s announcement, AerCap’s Chief Executive Officer, Aengus Kelly, 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 on the acquisition, GE’s Chairman and CEO, H. Lawrence Culp, Jr., added,
“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 has been unanimously approved by the Boards of Directors of AerCap and GE and under the agreement GE will receive 111.5 million newly issued AerCap shares, $24 billion in cash and $1 billion of AerCap notes and/or cash. Once the transaction is completed, GE will own approximately 46 percent of the combined company and will hold two seats on the AerCap Board. Citi and Goldman Sachs have committed $24 billion in financing for the transaction. The adjusted debt-to-equity of the combined company at transaction closing is expected to be 3.0x and AerCap plans on maintaining and returning to their target adjusted debt-to-equity ratio of 2.7x rapidly.
AerCap Holdings N.V. (NYSE: AER) is the global leader in aircraft leasing and maintains one of the most attractive order books in the industry. The company serves around 200 customers in 80 countries with comprehensive fleet solutions. AerCap is headquartered in Dublin and maintains offices in Shannon, Los Angeles, Singapore, Amsterdam, Shanghai, Abu Dhabi, Seattle and Toulouse.
GE Capital Aviation Services (GECAS) is a global aviation lessor and financier, with over five decades of experience. The company provides financing solutions for narrow and widebody aircraft, regional jets, turboprops, freighters, engines, helicopters and materials. GECAS offers a broad array of financing products and services on these assets including operating leases, purchase/leasebacks, capital markets, and airframe parts management. GECAS owns, services or has on order approximately 1,700 aircraft and serves over 200 customers in 75 countries from a network of 15 offices around the world.
Source(s): AerCap Holdings N.V., GE Capital Aviation Services (GECAS)