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May 17, 2022

SMBC Aviation Capital to buy Dublin-based aircraft lessor Goshawk

The transaction does not include Goshawk’s aircraft located in Russia.

Irish Aircraft leasing firm SMBC Aviation Capital has struck a deal with NWS Holdings and Chow Tai Fook Enterprises to take over Dublin-based aircraft lessor Goshawk Aviation for an enterprise value of $6.7bn.

The deal is currently awaiting regulatory approval and includes the acquisition of a portfolio of 176 owned and managed aircraft. However, the deal does not cover Goshawk’s aircraft located in Russia.

Upon completion, it will lead to the creation of the largest Japanese-owned aircraft lessor and second-largest global player by number of aircraft.

The merged entity will have a portfolio of 709 owned and managed aircraft, as well as another $13bn of orders from Boeing and Airbus, which include 261 new technology narrowbody aircraft.

It will operate as SMBC Aviation Capital, with a single corporate structure incorporated in the Republic of Ireland and based in Dublin.

The deal is anticipated to complete in the second half of the year.

SMBC Aviation Capital CEO Peter Barrett said: “This is the right transaction for SMBC Aviation Capital, allowing us to better serve our customers in a fast-evolving sector whilst also accelerating our growth and delivering significant value for our shareholders.

“The combined business will continue to have a disciplined focus on young, liquid, most in-demand narrowbody aircraft, with one of the most environmentally friendly portfolios of any major leasing company, together with 261 new-generation, fuel-efficient aircraft on order.

“We are undertaking this transaction at a strategic point in the cycle with a strong recovery building across the global airline industry, and we expect the transaction to be accretive to SMBC Aviation Capital’s return on capital.”

SMBC Aviation Capital will fund the deal through a combination of debt and equity, with the debt financing to be provided by shareholders, banks and capital markets.

The company’s shareholders, including Sumitomo Mitsui Financial Group and Sumitomo Corporation, will provide the equity.

Goldman Sachs International served as the financial adviser to SMBC Aviation Capital for the transaction, while Cravath, Swaine & Moore and Milbank were its legal advisers.

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