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AIG to sell aircraft leasing business In $5.4 billion deal

Dec. 16, 2013, New York, N.Y. - American International Group Inc said it would sell its aircraft-leasing business to AerCap Holdings NV in a deal valued at about $5.4-billion, marking the insurer’s exit from its last non-core business.


December 16, 2013
By Reuters

AIG, which was nearly wiped out by derivative bets in the financial
crisis, has been trying for at least four years to sell International
Lease Finance Corp (ILFC) to help repay the costs of a 2008 U.S.
government bailout.

The deal includes $3-billion in cash and 97.56 million newly issued
AerCap common shares, AIG said on Monday. The sale will give AIG a 46
per cent stake in AerCap.

 

AIG shares rose 1.5 per cent to $50.48 before the bell on Monday. AerCap shares rose 8.7 per cent to $27.10.

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Netherlands-based
AerCap, which buys aircraft and rents them to airlines, will vie with
General Electric’s Gecas unit as the world’s largest aircraft-leasing
company by fleet size after the deal.

ILFC will become a wholly
owned subsidiary of New York-listed AerCap. AIG will be entitled to
nominate two directors for election to the board of AerCap.

 

AIG
said in December 2012 that it had reached a deal to sell up to 90 per
cent of ILFC to a group of investors based mainly in China for
$4.7-billion, but the deal never went through.

 

AIG CEO Robert
Benmosche said in November that the insurer hoped to decide on a sale or
an initial public offering of ILFC in the fourth quarter.

 

The transaction is expected to close in the second quarter of 2014, AIG said on Monday.

 

UBS was the financial adviser to AerCap while Goldman Sachs was the financial adviser to AerCap’s board.