General Electric is set to close a deal to sell its aircraft leasing business to Irish group AerCap for more than $ 30 billion, the US industrial group’s latest move to restructure its business, people informed at this subject.
An agreement, which would associate GE Capital Aviation Services (Gecas) with the leasing company AerCap, could be announced as of Monday, according to several people informed of the transaction.
The merger would mark the latest attempt by Larry Culp, CEO of GE, to topple the Boston-based group since his appointment in 2018, during which time the group suffered a management reshuffle, dividend cuts and a US Securities and Exchange. Commission accounting investigation.
Many of GE’s problems stemmed from its GE Capital division, the financial unit that was hit hard in the aftermath of the 2008 recession. The company has sold a range of important assets over the past five years, including biotechnology company to Danaher for $ 21 billion and his stake in Baker Hughes, the petroleum services company.
Gecas is one of the largest leasing companies in the world, buying planes and leasing them from airlines.
GE had been exploring opportunities for several years to sell its business with a competitor as the company tried to divest itself of assets it did not consider essential to its business model.
In 2019, Bloomberg reported that private equity group Apollo Global Management was planning to buy Gecas for up to $ 40 billion.
GE was saddled with heavy debt after years of aggressive negotiation under the leadership of former CEO Jack Welch. The company’s stock price is trading at a fraction of what it was when Welch left the company in 2001 as Jeff Immelt, John Flannery and Culp, his three successors, took up the challenge of dismantling the empire.
GE declined to comment and AerCap could not immediately be reached for comment.
The aviation industry has been among the most affected by the pandemic over the past year. However, the production of several vaccines to fight Covid-19 has lifted the outlook for the sector’s recovery, as travelers are expected to resume flying more regularly.
Aircraft rental companies have seen renewed investor interest, raising a total of $ 14.9 billion in debt at the start of the year.
AerCap has expanded its activities, becoming a major owner of Norwegian Air Shuttle, the besieged government airline, with a 15.9% stake last year. In 2013, the Irish company agreed to buy International Lease Finance Corporation for $ 7.6 billion.
News of the GE-AerCap transaction was first reported by The Wall Street Journal.