China-based Bohai Leasing has entered into an exclusivity agreement to acquire Irish aircraft leasing firm Avolon Holdings for $2.6bn.
Under the deal, the companies will be able to negotiate definitive agreements for the proposed transaction up to 7 September.
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Current terms state that Bohai will buy Avolon’s issued and outstanding common shares for $32 per unit.
Bohai will deposit $50m into an escrow account, in addition to the $25m already held in connection with the cash tender offer made by Bohai on 31 July.
If Avolon intends to formalise the definitive agreement, it will be eligible to receive the $75m deposit; however, Bohai will increase the deposit to $250m if the deal is not concluded under certain circumstances.
Avolon has a total enterprise value of $7.6bn and this deal will give 100% ownership to Bohai.
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By GlobalDataAvolon operates offices in China, Dubai, Singapore and the US. As of 30 June, the company had a fleet of 260 aircraft on order, or serving 56 customers in 33 countries.
In July, Bohai signed a deal to acquire a 20% stake in the company Avolon for $429m.
Last year, Aviation Industry Corporation of China (AVIC) and China Investment considered acquiring Avolon for around $5bn, but negotiations ended between the companies.
