China-based Bohai Leasing has signed a definitive agreement to acquire Irish aircraft leasing firm Avolon Holdings for $7.6bn, including debt.
Approved by Avolon’s board of directors, the transaction will offer shareholders $31 cash for each common share of Avolon.
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Although the offer is $1 per share below Bohai’s previous offer, it represents a 31% premium to Avolon’s closing price of $23.73 per share prior to the Chinese firm’s plan to acquire a 20% stake in Avolon.
Avolon chairman Denis Nayden said: "Avolon has delivered significant returns for all shareholders and we believe Bohai are the right shareholder for the Avolon business in the next stage of growth.
"We believe Bohai will enhance 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."
Bohai has agreed to increase its deposit by up to $350m from $250m as said earlier, and has already paid a deposit of $75m.
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By GlobalDataThe company will pay $200m today and the remaining $75m by 15 September.
Subject to customary conditions, including regulatory approvals, the transaction is expected to be concluded by the first quarter of 2016.
Bravia Capital is providing financial advisory services to Bohai, while JPMorgan and Morgan Stanley are serving as financial advisors to Avolon on the transaction.
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.
