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General Electric is reaching an agreement to sell its aircraft leasing business to Irish group AerCap for more than $ 30 billion, the latest move by the US industrial group to restructure its business, people briefed on the matter said.
A deal, which would combine GE Capital Aviation Services (Gecas) with leasing company AerCap, could be announced on Monday, according to several people briefed on the transaction.
The merger would mark the latest attempt by Larry Culp, GE chief executive, to change the Boston-based group since it was appointed in 2018, during which time the group has experienced a leadership restructuring, dividend cuts and a US Securities Accounting Research Commission.
Many of GE’s problems stemmed from its GE Capital division, the financial unit that was hit hard after the 2008 recession. The company has sold a number of large assets in the last five years, including its biotech business to Danaher. for $ 21 billion and its stake in Baker Hughes, the oilfield services company.
Gecas is among the largest leasing companies in the world, buying planes and leasing them to airlines.
GE had been exploring opportunities to sell its operations to a competitor for several years, as the company has been trying to divest assets it does not consider critical to its business model.
In 2019, Bloomberg reported that private equity group Apollo Global Management was exploring buying Gecas for up to $ 40 billion.
GE had been struggling under a heavy debt load after years of aggressive deals under former CEO Jack Welch. The company’s stock price is trading at a fraction of where it was when Welch left the company in 2001 when Jeff Immelt, John Flannery and Culp, his three successors, faced the challenge of dismantling the empire.
GE declined to comment and AerCap could not immediately be reached for comment.
The aviation industry was among the hardest hit by the pandemic in the past year. However, the production of multiple vaccines to combat Covid-19 has raised the recovery prospects for the sector, as travelers are expected to start flying again more regularly.
Aircraft leasing companies have seen renewed interest from investors, generating a combined debt of $ 14.9 billion earlier in the year.
AerCap has been expanding its business, becoming a major shareholder in Norwegian Air Shuttle, the conflicted state airline, last year with a 15.9 percent stake. In 2013, the Irish company agreed to buy the International Lease Finance Corporation for $ 7.6 billion.
The news of the GE-AerCap transaction was first reported by the Wall Street Journal.
