GE, AerCap join air leasing businesses in $30 billion deal

GE, AerCap join air leasing businesses in $30 billion deal

SeattlePI.com

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General Electric is combining its aircraft leasing business with Ireland’s AerCap Holdings in a deal valued at more than $30 billion, a big step in what has become a six year odyssey to reshape the one-time sprawling, global conglomerate.

Pushing GE Capital Aviation Services, or GCAS, into a separate business puts GE closer to its goal of shedding most of the colossal financial wing that nearly sank it during the 2008 financial crisis.

“Today marks GE’s transformation to a more focused, simpler, and stronger industrial company," Chairman and CEO Larry Culp said in a prepared statement Wednesday.

AerCap will pay about $24 billion in cash for GCAS, and GE will take an approximately 46% ownership stake in the combined company, and $1 billion paid in AerCap notes or cash at closing.

GE’s Capital Aviation Services and AerCap are two of the biggest aircraft leasers in the world with more than 2,500 aircraft between them. The companies both lease commercial aircraft to hundreds of airlines around the world.

The global pandemic sent shockwaves through the entire air travel industry, and the deal announced Wednesday could have extensive ramifications.

It could mean more pressure on plane manufacturers like Boeing and Airbus if beleaguered airlines chose not to buy planes. It could also mean some breathing room for airlines that are reeling from plunging air travel, if they can cut near-term costs through leases.

GE also said Wednesday that its board will recommend shareholders approve a reverse stock split at a ratio of 1-for-8 and a corresponding proportionate reduction in the number of authorized shares of common stock.

GE plans to lower its debt by about $30 billion after the deal's closing using transaction proceeds and existing cash sources. This will bringing...

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