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In case you did not know, American International Group (AIG) was in the jet-leasing business, but not anymore. It has decided to sell its leasing business to focus more on insurance.
The Wall Street Journal reported that AIG will be selling the International Lease Finance Corp. to AerCap Holdings N.V. for $5.4 billion in cash and stock.
AIG has been trying for four years to sell its leasing business without much success, noted Reuters. A year ago, the insurance business agreed to sell 90 percent of the company to a group of investors in China for $4.7 billion, but it never happened.
The insurance company decided to put up the International Lease Finance Corp. for sale after a $182 billion government bailout in 2008.
Now, AIG has a buyer, AerCap, a Netherlands-based aircraft leasing company that likes to buy aircrafts and lease them to airlines; they are like wholesalers of airplanes. By buying AIG’s leasing business, AerCap will become the largest aircraft leasing company due to the amount of fleets they have.
AIG believes that selling its non-insurance business will help them focus more on its foundation, insurance.
AIG will be paid $3 billion in cash and 97.56 million new common shares of AerCap and AIG will hold the shares for at least nine months after the deal is closed.
Photo courtesy of Wikimedia Commons.