Lessor SMBC Aviation Capital is buying smaller rival Goshawk Aviation in a deal worth $6.7 billion, which will create the world’s second largest global lessor in terms of aircraft numbers.
SMBC Aviation said it will acquire a portfolio of 176 owned and managed aircraft as part of the transaction. The combined business, which will be based in Dublin and operate as SMBC Aviation Capital, will have a portfolio of 709 owned and managed aircraft, with a further 261 Boeing and Airbus narrowbodies on order worth $13 billion.
Any aircraft owned by Goshawk which are located in Russia and therefore subject to EU sanctions are excluded from the transaction.
The combined business will also create the largest Japanese-owned lessor. SMBC Aviation’s main shareholders are Sumitomo Mitsui Financial Group and Sumitomo Corporation.
“We are undertaking this transaction at a strategic point in the cycle with a strong recovery building across the global airline industry,” Peter Barrett, Chief Executive Officer of SMBC Aviation Capital, commented in a statement released on May 16, 2022.
SMBC said the acquisition fitted with its strategy of focusing on young narrowbody aircraft, which will account for over 82% of its combined fleet.
“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,” Barrett said.
The deal, financed through a combination of debt and equity, is expected to close in the second half of 2022.