Irish aircraft lessor SMBC Aviation Capital and other investors have completed their takeover of rival Air Lease, the group confirmed on Wednesday.
SMBC, one of its shareholders, Sumitomo Corporation, and investors Apollo and Brookfield announced a $7.4 billion (€6.3 billion) deal to buy Dublin and Los Angeles-based Air Lease last September.
The parties said on Wednesday that they had completed the transaction and had renamed the business Sumisho Air Lease Corporation.
Dublin-headquartered SMBC will manage most of Air Lease’s aircraft, bringing to 1,700 the number of jets that the business owns, services or has pledged to airlines.
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Air Lease’s orders for new aircraft will transfer to SMBC, bringing its total order book with manufacturers Airbus and Boeing to around 420, said a statement.
SMBC and Sumisho Air Lease buy aircraft using their own cash and borrowings, then lease them to commercial airlines, whose rents provide the lessors with their main source of revenue.
SMBC is among the top three aircraft lessors in the world. The Sumisho Air Lease deal strengthen’s the company’s position.
Air Lease shareholders received $65 a share for their stock under the terms of the agreement announced in September. That valued the sale at $7.4 billion cash, or around $28.2 billion including debt that the buyers agreed to take on.
SMBC chief executive, Peter Barrett hailed the transaction as “transformational” for the Irish business at the time. On Wednesday Barrett predicted that it would create a competitive, well-capitalised leasing business.
Pressure on deliveries from Airbus and Boeing combined with growing demand for air travel have boosted the value of aircraft and lessors.
“In a supply-constrained environment, SMBC Aviation Capital’s enhanced scale, financial strength and deep market insight will allow us to provide the new technology aircraft and the flexibility our customers need to achieve their growth ambitions,” said Barrett.
Takao Kusaka, group chief executive, transportation and construction systems, at Sumitomo Corporation, said the takeover would boost the size, quality and resilience of its aviation business.
The corporation is a shareholder in SMBC along with Sumitomo Mitsui Financial Group.
Noriyuki Hiruta, chief executive, Sumisho Air Lease, said Wednesday marked the beginning of a new chapter for the business.
