GE has announced an agreement to combine its GE Capital Aviation Services business (Gecas) with Ireland-based AerCap Holdings, a global aircraft leasing company, for a consideration of more than $30 billion.

The combined company will be an industry leader across all areas of aviation leasing, with over 2,000 owned and managed aircraft, over 900 owned and managed engines, over 300 owned helicopters and approximately 300 customers around the world.

AerCap CEO Aengus Kelly said: “We are excited about this opportunity to bring together two leaders in aviation leasing. AerCap and Gecas both have industry-leading teams, attractive portfolios, diversified customer bases, and order books of the most in-demand new technology assets. This combination will enhance our ability to provide innovative and attractive solutions for our customers and will strengthen our cash flows, earnings, and profitability. This business combination will also strengthen our longstanding partnership with GE Aviation, which we look forward to working with closely in the future.”

GE Chairman and CEO H Lawrence Culp, Jr. said: “Today marks GE’s transformation to a more focused, simpler, and stronger industrial company. Coupled with our continuing efforts to strengthen GE's performance, operations, and culture, this deal brings GE closer to our future—delivering value for the long term and leading the energy transition, precision health, and the future of flight.

“AerCap is the right partner for our exceptional Gecas team. Bringing these complementary franchises together will deliver strategic and financial value for both companies and their stakeholders. We’re creating an industry-leading aviation lessor with expertise, scale and reach to better serve customers around the world, while GE gains both cash and a meaningful stake in the stronger combined company, with flexibility to monetize as the aviation industry recovers.”

Culp concluded: “This is the right time to further accelerate our transformation. This action will enable us to significantly de-risk GE and continue on our path to being a well-capitalized company. Building on our multi-year efforts to solidify our financial position, we expect to use the proceeds to further reduce debt for a total reduction of more than $70 billion since the end of 2018.”

The combined company will be one of aviation leasing’s leading franchises, bringing together complementary portfolios across aircraft, engines, and helicopters. Leveraging 100 years of experience in the market and a pool of expert talent and leadership, the combined company’s broader revenue base, customer diversification, and strong balance sheet will enhance its ability to invest for growth and serve customers through industry cycles.

The transaction provides the following key strategic benefits:

•    Leading aircraft leasing platform with expanded customer breadth and reach, given AerCap and GECAS’s complementary customer bases with limited overlap.
•    Best-in-class trading platform with deep market insight and relationships: over the past four years AerCap and GECAS have sold on average over $5 billion of assets per year.
•    Narrowbody aircraft will represent approximately 60% of the combined aircraft fleet.
•    New technology aircraft will represent approximately 56% of the combined in-service fleet, expected to grow to approximately 75% in 2024.
•    Attractive order book of 493 new technology aircraft, more than 90% of which are narrowbodies.
•    Premier engine leasing business adds revenue diversification and greater ability to provide innovative solutions to our airline customers. – TradeArabia News Service