BEIJING: China’s Bohai Leasing Co said here the other day it has agreed to buy 20 percent of US-listed Avolon Holdings Ltd for US$429 million, in the latest acquisition by a unit of aviation and shipping conglomerate HNA Group.
The purchase would be HNA’s biggest in logistics since the US$1 billion buy of marine container leasing firm GE SeaCo in 2011, and would provide access to a global aircraft leasing market dominated by GE Capital and AerCap Holdings NV.
“This investment in Avolon will bring Bohai an increasing presence in the global aircraft leasing sector and Bohai will have a strong interest in benefiting from Avolon’s profitable growth,” Chief Executive Chris Jin said in a statement.
Chinese lessors, mostly backed by state-owned banks, have been expanding in recent years, as large carriers such as Hainan Airlines Co, Air China, China Eastern Airlines Corp and China Southern Airlines Co opened more routes at home and overseas.
Aircraft maker Boeing Co estimated China will need more than 6,000 new aircraft over the next 20 years.
Bohai parent HNA owns shipping and aerospace companies, including Hainan Airlines, and has been buying logistics and hotel assets to expand globally.
Avolon sells aircraft leasing and lease management services to airlines and aircraft investors. The Dublin-based firm has a fleet of more than 260 aircraft serving 56 customers in 33 countries.
Those customers include American Airlines Group Inc, Air France KLM SA and Ryanair Holdings Plc.
Bohai’s cash tender of US$26 for each Avolon share represents a 14.5 percent premium to the stock’s volume-weighted average price last week, and a 30 percent premium to its initial public offering price of US$20 in December, said a joint statement from Bohai and Avolon.
The offer is open to all Avolon shareholders and will be launched at the end of this month after approval from Bohai’s shareholders, the pair said.
The directors of both companies support the deal, the pair said.
Previously, sovereign wealth fund China Investment Corp partnered state-owned Aviation Industry Corp of China to explore a takeover of Avolon, but ended talks in October.
