AerCap, the Netherlands headquartered and Dublin based aviation leasing company, is to acquire the aircraft-leasing business of AIG for about $5.4 billion. The deal marks an exit for the insurer, which was nearly wiped out by derivative bets in the financial crisis, from its last non-core business.
AIG has been trying for at least four years to sell International Lease Finance Corp (ILFC) to help repay the costs of a 2008 US government bailout. The deal includes $3 billion in cash and 97.56 million newly issued AerCap common shares, AIG said. The sale will give AIG a 46 per cent stake in AerCap. AIG shares rose 1.5 per cent to $50.48 on news of the deal. AerCap shares rose 8.7 per cent to $27.10.
Netherlands-based AerCap, which buys aircraft and rents them to airlines, will vie with General Electric’s Gecas unit as the world’s largest aircraft-leasing company by fleet size after the deal. AerCap emplyees about 50 people in Dublin.
ILFC will become a wholly owned subsidiary of New York-listed AerCap.
AIG said in December 2012 that it had reached a deal to sell up to 90 per cent of ILFC to a group of investors based mainly in China for $4.7 billion, but the deal never went through. AIG CEO Robert Benmosche said in November that the insurer hoped to decide on a sale or an initial public offering of ILFC in the fourth quarter.
The transaction is expected to close in the second quarter of 2014.
Reuters