AerCap Holdings NV’s share price down, finalizes the 7.6-billion-dollars deal with AIG over the acquisition of its ILFC unit

AerCap Holdings NV finalised its deal with American International Group Inc. over the latters International Lease Finance Corp. The acquisition is estimated to 7.6 billion dollars and is considered to form the biggest independent jet-leasing company. More than 1300 aircraft will be controlled by AerCap Holdings, which will also hold the authority upon a 24-billion-dollar order book.

According to an official statement, the cash-and-stock deal amounts to 7.6 billion dollars, and American International Group Inc. will receive 3 billion dollars in cash and nearly 97.6 million newly issued common shares of AerCap Holdings NV. The headquarters of the newly-formed company will be in the Netherlands.

Mr. Aengus Kelly, who is the Chief Executive Officer of AerCap Holdings, said in the companys statement, which was cited by Bloomberg: “With approximately $45 billion of assets coupled with a diverse fleet of 1,300 aircraft and an attractive forward order book, AerCap will be a driving force in the industry.”

International Lease Finance Corp. is the last core unit of American International Group Inc., which was sold after the company started stripping off assets in order to repay the financial help it got from the government. The government bailout of American International Group amounted to a total of 182.3 billion dollars, which were paid back to the country two years ago. The final price of the cash-and-stock agreement exceeds the figures announced in December 2013, when the deal was first proposed, by more than 2 billion dollars.

Over the years AerCap Holdings has expanded its reach thanks to several acquisitions and has managed to maintain its prosperous pace. The company embraced an aggressive strategy of broadening its fleet and sold older aircraft at a profit.

The sale of International Lease Finance Corp. is also considered profitable for American International Group. As Mr. Robert Benmosche, who is the Chief Executive Officer of the company said, the sale is considered to have “a positive impact on AIGs liquidity and credit profile”, and the net cash proceeds to the company amounted to about 2.4 billion dollars.

AerCap Holdings NV was 0.89% down to close at 46.59 dollars per share yesterday, marking a one-year change of +179.82%. According to the information published on CNN Money, the 7 analysts offering 12-month price forecasts for AerCap Holdings N.V. have a median target of 51.00, with a high estimate of 55.00 and a low estimate of 24.00. The median estimate represents a +9.47% increase from the last price of 46.59.