(The articles "AerCap Agrees To $300M Purchase of Rival Genesis"
and "WSJ(9/19) Jet-Leasing Firm Aercap To Acquire Rival Genesis,"
both published on Sept. 18, incorrectly reported what CreditSights
said about ILFC's funding costs. A corrected version follows.)
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 Genesis's balance sheet, the companies said the deal is
worth $1.75 billion.
The deal comes as credit markets remain constrained, limiting
the ability to roll over debt. For instance, International Lease
Finance Corp.'s debt is trading at rates that are roughly triple
the average financing rates of the last few years, according to a
recent report from CreditSights. ILFC, the world's largest aircraft
lessor by fleet value, needs to deal with about $18 billion of debt
coming due the next three years.
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