General Electric said on Wednesday that it had reached an agreement to sell its jet leasing business to rival AerCap in a $ 30 billion deal, a move that would create a large lessor as the aviation industry the Covid-19 pandemic struggles and GE moves to reduce. his debt burden.
The agreement will give GE a 46% stake in the combined company, generating approximately $ 24 billion in cash for the conglomerate and further reducing it. GE Capital Aviation Services, or Gecas, is a part of GE Capital that has been abolished since the financial crisis. GE said it would reduce its debt by about $ 30 billion after closing the deal using the proceeds from the deal and existing cash.
GE shares rose 3.5% in after-market trading after the deal was announced, while AerCap’s changed little.
Both companies are major customers of both Boeing and competing Airbus. Cecas owned, maintained or ordered the highest 1,600 aircraft, and it had assets worth $ 35.86 billion by the end of 2020. At the end of last year, AerCap owned, operated or ordered approximately 1,330 aircraft with assets of assets. worth $ 42 billion, according to the regulations.
Irish-based AerCap, whose shares are traded on the NYSE, has a market capitalization of nearly $ 7.27 billion as of the end of Tuesday. Shares have risen more than 10% this week since the Wall Street Journal reported on Sunday that the two companies were close to an agreement.
The Gecas unit attributed a loss of $ 786 million last year to a profit of $ 1.03 billion a year earlier, according to GE’s annual report. AerCap posted a net loss of nearly $ 299 million last year, with a profit of more than $ 1.1 billion in 2019, and a profit of $ 28.5 million in the fourth quarter.