China-based Bohai Leasing has signed a deal to acquire a 20% stake in Ireland-based aircraft leasing company Avolon for $429m.
Under the deal, Bohai will pay $26 for each share of Avolon, a 14.5% premium over its average price last week.
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Avolon operates offices in China, Dubai, Singapore and the US. As of 30 June, the company has a fleet of 260 aircraft serving 56 customers in 33 countries.
With this acquisition, Bohai will be able to strengthen its presence in the global aircraft leasing segment.
Avolon will gain access to Bohai’s expertise in aviation and transportation finance, and leasing sectors in China to fortify its relationships in Chinese aviation market.
Avolon chairman Denis Nayden said: "Bohai Leasing’s strategic investment enhances Avolon’s profile, positioning and relationships in the Chinese aviation market, a market which we believe offers one of the most compelling growth opportunities in global aviation over the next two decades."
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By GlobalDataBohai will launch the cash tender offer for the shares on 31 July, following approval from its shareholders.
The transaction is expected to be concluded by the end of August. Bohai will nominate one non-executive director to Avolon board.
Bravia Capital and JP Morgan Securities are acting as financial advisors to Bohai and Avolon.
Last year, Aviation Industry Corporation of China (AVIC) and China Investment considered the acquisition of Avolon for around $5bn; however, negotiations ended between the companies.
