AIG is selling its aircraft-leasing business International Lease Finance Corp. to AerCap, in a cash-and-stock deal valued at approximately $5.4 billion.
International Lease Finance has almost 1,000 owned and managed aircraft, and has commitments to buy approximately 330 high-demand, fuel-efficient aircraft. It will become a subsidiary of AerCap.
American International Group Inc. said Monday that this is the last major sale of one of its non-core assets. AIG received the biggest bailout of the financial crisis five years ago. The insurer has repaid the bailout money and has undergone a massive restructuring that cut its size in half as it focused on its core insurance business.
AIG initially had a deal to sell up to 90 percent of International Lease Finance’s stock to Jumbo Acquisition Ltd., but ended that agreement before striking its deal with AerCap.
AerCap, based in the Netherlands, is an aircraft-leasing company. It has offices in Ireland, the U.S., China, Singapore and the United Arab Emirates.
AIG said it will get $3 billion in cash, and about 97.6 million newly issued shares of AerCap Holdings NV – or about 46 percent of AerCap’s stock – in the deal.
It will enter a stockholders agreement and registration-rights agreement with AerCap, which will give it the right to nominate two AerCap board members.
AIG also agreed to provide a $1 billion, five-year unsecured revolving credit facility, which will be available when the deal closes.
The transaction is expected to close in 2014’s second quarter. It still needs approval from AerCap shareholders and is subject to required regulatory approvals, including U.S. and foreign regulatory reviews and approvals.