DOW JONES NEWSWIRES
AerCap Holdings NV (AER) announced it will acquire Genesis Lease
Ltd. (GLS) in a $300 million all-stock merger of European
aircraft-leasing companies.
Genesis disclosed Monday it was in merger talks with an unnamed
partner, but a trade publication said AerCap was expected to make a
takeover offer.
The bid is one AerCap share for each Genesis share. AerCap
shares closed Thursday at $8.81 and Genesis American depositary
shares ended at $8.45. Genesis holders would own 29% of the
combined company.
Based on Gensis' balance sheet, the companies said the deal is
worth $1.75 billion.
The deal comes as credit markets remained constrained, limiting
the ability to roll over debt. International Lease Finance Corp.
has seen its borrowing costs triple because of the credit crisis,
according to a recent report by CreditSights, and needs to deal
with $18 billion of debt coming due the next three years that bond
investors aren't willing to refinance.
Following the deal, AerCap would have 116 airline customers in
50 countries and a lease portfolio currently valued at $6 billion,
said Chief Executive Klaus Heinemann.
General Electric Co.'s (GE) aviation-financing business has been
servicing Genesis' portfolio, but GE has agreed to let the deal be
ended at AerCap's option.
Industry watchers said earlier this week that a deal between
AerCap and Genesis makes sense. Since both companies are in good
financial condition, the move would form a larger company with more
industry clout. Both companies have said that, given the relative
young age of their fleets, they have had no trouble placing leased
aircraft with airlines around the world.
-By Kevin Kingsbury, Dow Jones Newswires; 212-416-2354;
kevin.kingsbury@dowjones.com