(Corrects paragraph 2 to make clear AIG has repaid its debt to
Dec 16 American International Group Inc
said it would sell its aircraft-leasing business to AerCap
Holdings NV in a deal valued at about $5.4 billion,
marking the insurer's exit from its last non-core business.
AIG, which was nearly wiped out by derivative bets in the
financial crisis, has been trying for at least four years to
sell International Lease Finance Corp (ILFC). The insurer, which
had received a $182 billion government support package in 2008,
repaid the last of the money owed to the U.S. Treasury in March.
The deal includes $3 billion in cash and 97.56 million newly
issued AerCap common shares, AIG said on Monday. The sale will
give AIG a 46 percent stake in AerCap.
AIG shares rose 1.5 percent to $50.48 before the bell on
Monday. AerCap shares rose 8.7 percent to $27.10.
Netherlands-based AerCap, which buys aircraft and rents them
to airlines, will vie with General Electric's Gecas unit
as the world's largest aircraft-leasing company by fleet size
after the deal.
ILFC will become a wholly owned subsidiary of New
York-listed AerCap. AIG will be entitled to nominate two
directors for election to the board of AerCap.
AIG said in December 2012 that it had reached a deal to sell
up to 90 percent of ILFC to a group of investors based mainly in
China for $4.7 billion, but the deal never went through.
AIG CEO Robert Benmosche said in November that the insurer
hoped to decide on a sale or an initial public offering of ILFC
in the fourth quarter.
The transaction is expected to close in the second quarter
of 2014, AIG said on Monday.
UBS was the financial adviser to AerCap while Goldman Sachs
was the financial adviser to AerCap's board.
(Reporting by Avik Das in Bangalore; Editing by Saumyadeb