-By Josh Abraham, London School of Economics
DEAL OVERVIEW
Acquirer: AerCap
Target: General Electric Capital Aviation Services (Gecas)
Value: US$30 billion ($24 billion in cash, 46% ownership stake in combined company, $1 billion in AerCap notes and/or cash upon closing)
Announced date: March 10th, 2021
Closed date: Ongoing
Financial Advisors: Citi and Morgan Stanley for Aercap, PJT Partners LP, Goldman Sachs, and Evercore for Gecas
Legal Counsel: Cravath, Swaine & Moore LLP, NautaDutilh NV and McCann Fitzgerald for AerCap, Paul, Weiss, Rifkind, Wharton & Garrison LLP, Clifford Chance LLP, and A&L Goodbod
COMPANY DETAILS
Acquiring company: AerCap
AerCap is the world’s largest aviation lessor, and the largest owner of commercial aircraft, with headquarters situated in Dublin, and further offices in Shannon, Los Angeles, Singapore, Amsterdam, Shanghai, Abu Dhabi, Seattle, and Toulouse

CEO: Aengus Kelly
Number of Employees: 377
Market cap: $7.9 billion
Enterprise Value: $34.5 billion
LTM Revenue: $4.1 billion
LTM EBITDA: $2.1 billion
Target company: Gecas
Gecas is a subsidiary of General Electric (GE), and is another leading aviation lessor and financier. With 15 offices worldwide, the company owns 1700 aircraft, and supplies freighters, engines, helicopters or materials

CEO: H. Lawrence Culp, Jr.
Number of Employees: 400
Market cap: N/A
Enterprise Value: N/A
LTM Revenue: N/A
LTM EBITDA: N/A
RATIONALE
A key reason behind this deal is the obvious synergies than can be exploited. With both companies in the aviation leasing business, this will allow for greater market share overall in the industry for AerCap; the combined entity would control about 18% of the current global leased fleet of Western-manufactured narrowbodies and widebodies, 13 percentage points higher than the next largest player. This is strengthened by the fact that they both have non-overlapping customer bases. Moreover, for the acquirer, adding an additional 493 new technology aircraft to their portfolio is an equally exciting prospect. On GE’s side, the deal will allow them to meet their targets of deleveraging to the value of $3 billion over the next year, while also reducing risk and cashing in on its largest unit while possible, having seen its revenue dwindle by 20% to $4 billion in 2020, as a result of the pandemic
RISKS AND UNCERTAINTIES
The main risk of this merger comes in the form of anti-competitive practice. With both companies being the two largest players in the industry by a considerable distance, an investigation by both UK and US regulators seems likely, or even the demand of significant concessions. However, with the combined entity still expected to control less than 25% of the market, the lack of monopoly stature does ease the likelihod of this to some extent. A further risk is that with the world still living with the pandemic and its effects, it is unclear whether the airline industry will ever return to its usual performance pre-2020 in the short run, and thus the financial benefits expected from this deal may not be realised until further down the line.