AIG selling aircraft leasing unit in $5.4B deal

Insurance giant American International Group is selling its aircraft leasing business International Lease Finance Corp. to Netherlands-based AerCap in a cash-and-stock deal valued at about $5.4 billion.AIG's aircraft leasing business, which has almost 1,000 owned and managed aircraft and commitments to buy approximately 330 high-demand, fuel-efficient aircraft, will become a subsidiary of AerCap."AerCap's acquisition of ILFC will create the leading global franchise in the aircraft leasing industry," said AerCap's CEO Aengus Kelly in a statement. "This transaction presents a unique united-promostrategic opportunity to bring together the outstanding and experienced personnel from both companies and two attractive portfolios of modern aircraft on lease to a highly diversified customer base."The sale of ILFC represents the last of AIG's non-core assets. The company has undergone a massive restructuring and repaid the $182.3 billion it received in the government's bailout during the financial crisis five years ago.

"Upon completion, the transaction will have a positive impact on AIG's liquidity and credit profile and will enable us to continue to focus on our core insurance businesses," said AIG president and CEO Robert H. Benmosche in a statement.AIG shares rose 87 cents, or more than 2%, to $51 in premarket trading less than 30 minutes before the market opening.AIG initially had a deal to sell up to 90% of International Lease Finance's stock to Jumbo Acquisition Ltd., but ended that agreement before striking its deal with AerCap, which has offices in Ireland, the U.S., China,knives supplier Singapore and the United Arab Emirates in addition to its Amsterdam headquarters.AIG said it gets $3 billion in cash and about 97.6 million newly issued shares of AerCap Holdings NV in the deal, or about 46 percent of AerCap's stock. It will enter a stockholders agreement and registration rights agreement with AerCap, which will give it the right to nominate two AerCap board members.AIG also agreed to provide a $1 billion, five-year unsecured revolving credit facility, which will be available when the deal closes.tyre changerThe transaction is expected to close in 2014's second quarter. It still needs approval from AerCap shareholders and is subject to required regulatory approvals, including U.S. and foreign regulatory reviews and approvals.