AerCap, a major aircraft leasing company, confirmed that the company is currently in active discussions with General Electric (GE) regarding the latter’s aircraft leasing business subsidiary, General Electric Capital Aviation Services (GECAS).

Reports of a potential deal between the two aircraft leasing companies first emerged on March 8, 2021, as first reported by the Wall Street Journal. The deal was near its completion, it was detailed at the time. Now, AerCap clarified in a filing with the United States Securities and Exchange Commission (SEC) that “discussions are ongoing.”

“The outcome of those discussions has yet to be determined and there can be no guarantee that an agreement will be reached or on the terms of any agreement,” the Irish aircraft leasing company clarified in the statement.

If the deal were to go through, the merger of AerCap and GECAS would, by far, create the largest aircraft leasing company. Currently, AerCap owns 939 aircraft, with 286 additional jets on order, while GECAS manages, owns, or has on order more than 1,600 aircraft, according to the company’s Q4 2020 report.

UPDATE 10-03-2021, 13:52 (UTC +3) AerCap confirmed that it completed its negotiations with GE and would acquire GECAS, forming a mega aircraft leasing company. AerCap will issue 111.5 million new shares, all of which will be allocated to GE. Furthermore, AerCap will pay $24 billion in cash and an additional $1 billion in notes or cash. "Upon completion of the transaction, GE is expected to own approximately 46% of the combined company and will be entitled to nominate two directors to the AerCap Board of Directors," indicated the press release, announcing the deal. Two banks, namely Citi and Goldman Sachs, will finance the deal.

“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," commented on the deal the chief executive officer of AerCap, Aengus Kelly.

The merger will result in AerCap owning and managing over 3,000 aircraft, 900 aircraft engines, over 300 helicopters across around 300 customers worldwide.

However, "the transaction is subject to approval by AerCap shareholders, receipt of necessary regulatory approvals and satisfaction of other customary closing conditions. The transaction is expected to close in the fourth quarter of 2021," noted AerCap.

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With a slowing down aircraft transaction market, two major leasing companies GECAS and AerCap, are eyeing a merger.