{"id":116304,"date":"2021-03-10T13:29:26","date_gmt":"2021-03-10T13:29:26","guid":{"rendered":"https:\/\/precoinnews.com\/?p=116304"},"modified":"2021-03-10T13:29:26","modified_gmt":"2021-03-10T13:29:26","slug":"aercap-to-buy-ges-aircraft-leasing-unit-in-30-billion-deal","status":"publish","type":"post","link":"https:\/\/precoinnews.com\/markets\/aercap-to-buy-ges-aircraft-leasing-unit-in-30-billion-deal\/","title":{"rendered":"AerCap to buy GE's aircraft-leasing unit in $30 billion deal"},"content":{"rendered":"
(Reuters) – The world\u2019s two largest aircraft leasing companies are combining to create a new financing giant after Ireland\u2019s AerCap finalised a deal worth more than $30 billion to buy the leasing unit of General Electric.<\/p> The two companies announced a deal on Wednesday after days of speculation surrounding the takeover of GE\u2019s leasing arm GECAS to create a portfolio of more than 2,000 jets, dwarfing industry rivals.<\/p>\n The tie-up creates easily the largest buyer of jetliners built by planemakers Airbus and Boeing and will reshape a global air finance industry that has attracted a flood of capital in recent years as investors elsewhere look for higher returns.<\/p>\n But it comes at a time when the independence of several leasing firms has been brought into question by the coronavirus crisis and could trigger more consolidation, analysts say.<\/p>\n In New York, shares in GE rose 2% to $14.28 in pre-market trade. AerCap was up 3.6% at $58.<\/p>\n The deal to buy GECAS, or GE Capital Aviation Services, includes about $24 billion in cash and $1 billion paid in AerCap notes and\/or cash upon closing. GE will hold a stake of about 46% in the combined company.<\/p>\n It marks the latest move by GE Chief Executive Larry Culp to reduce debt and focus the conglomerate on its industrial core – power, renewable energy, aviation, and healthcare.<\/p>\n Related Coverage<\/p>\n<\/p>\n Culp took over the reins at the struggling conglomerate in 2018, months after the 129-year-old company dropped out of Wall Street\u2019s blue-chip index following years of dwindling profits.<\/p>\n GE said it plans to reduce debt by about $30 billion after closing using transaction proceeds and existing cash sources.<\/p>\n The deal, which includes the transfer of about 300 helicopters, is expected to close in the fourth quarter of 2021.<\/p>\n Citi and Goldman Sachs have provided AerCap with $24 billion of committed financing for the transaction.<\/p>\n AerCap said the deal would swell its debt to 3.0 times equity but this adjusted ratio would return \u201crapidly\u201d to a targeted level of 2.7.<\/p>\n Analysts have said the scale of the combined entity, controlling about three times the number of aircraft as its nearest competitor, Dublin-based Avolon, could force AerCap to offload aircraft to meet anti-trust requirements.<\/p>\n