EU regulators approve Aercap’s €25bn leasing megadeal

Irish aircraft lessor’s takeover of GE Capital Aviation Services will create global leader

EU regulators have approved Irish group Aercap’s €25 billion takeover of GE Capital Aviation Services (Gecas) to create the world’s biggest aircraft lessor

EU regulators have approved Irish group Aercap’s €25 billion takeover of GE Capital Aviation Services (Gecas) to create the world’s biggest aircraft lessor

 

EU regulators have approved Irish group Aercap’s €25 billion takeover of GE Capital Aviation Services (Gecas) to create the world’s biggest aircraft lessor.

Aercap agreed to buy rival Gecas from US giant General Electric (GE) for $30 billion (€25 billion) in cash and shares in March, subject to competition watchdogs’ approval.

The deal includes about $24 billion in cash and $1 billion paid in Aercap notes or cash. It includes 111 million new shares and will give GE a stake of 46 per cent in the Aercap-controlled company.

The European Commission confirmed on Tuesday that it would allow the deal with no conditions attached, as it posed no threat to competition in the market for aircraft or aviation engine leasing.

Order book

Dublin-headquartered Aercap will own more than 2,000 planes, 300 helicopters and 900 engines following its purchase of Gecas, and it will have an order book of 500 aircraft.

The Irish company did not comment on Tuesday. According to reports, GE said that it expected the transaction to be completed by the end of this year. The US group’s chief executive, Larry Culp, said last month that the US department of justice had concluded its review of the deal.

The European Union was widely expected to approve the deal, which had already been cleared in June by US regulators. Reports last week indicated that Brussels regulators were likely to allow the transaction with no conditions attached. Confirmation of this means that the agreement has cleared a key regulatory hurdle.

While both parties stressed in March that their agreement was subject to competition regulators’ approval, they indicated that this was likely to be forthcoming by the end of this year.

‘Confident’

Peter Juhas, Aercap’s chief financial officer, told a press conference announcing the deal that the pair were “confident” of getting competition authorities’ backing.

Industry analysts believe that the impact of Covid-19 travel restrictions on aircraft lessors is likely to accelerate further consolidation in the industry.

Lessors buy aircraft from manufacturers, such as Airbus and Boeing, and lease them to airlines.

Air travel was one of the industries worst hit by the pandemic as governments imposed restrictions in their efforts to contain the virus’s spread.