AerCap Holdings NV on Wednesday established itself as the world's second-largest jet leasing company by assets, completing its $7.6 billion purchase of the ILFC unit of American International Group Inc.
Netherlands-based AerCap will control a fleet of more than 1,300 aircraft and a $24 billion order book in an industry booming from a switch to renting rather than owning planes by airlines.
The final sale price of the cash and stock deal is more than $2 billion above the indicative level when the companies announced the proposed deal in December, providing AIG with net cash proceeds of $2.4 billion.
AIG said it expects to record a nonoperating pretax gain of about $2.2 billion in the second quarter, resulting in an increase in book value of 97 cents a share.
The U.S. financial services group spent five years trying to offload International Lease Finance Corp. as part of its recovery plan following the financial crisis, and will retain a stake of around 46% in AerCap, which is also paying AIG $3 billion in cash.
AerCap has expanded through acquisitions and prospered—its shares have trebled over the past year—by aggressively churning its fleet, selling older planes at a profit.
The company's shares have climbed 21.5% so far this year, and the final sale price was calculated on its $47.01 closing price Tuesday.
The share of aircraft provided by leasing companies has doubled to around 40% over the past 20 years and continues to rise. Leasing allows airlines to hold down capital costs and insulate themselves from the risk of declining aircraft values.
AerCap will add ILFC's fleet of more than 900 planes to its own 377-jet portfolio, more than tripling its asset base and promoting it from a top-10 lessor into a global elite ranked behind only the Gecas unit of General Electric Co.
Aengus Kelly, who took over as AerCap's chief executive in 2011, will lead the enlarged group. Only one ILFC executive, Phillip Scruggs, was named to the senior AerCap team.
Henri Courpron, who was hired as ILFC's CEO in 2010 to turn around a company hindered by a weak balance sheet and an aging fleet, isn't joining AerCap.
A key attraction of ILFC was its $20 billion order book at a time when Airbus Group NV and Boeing Co. are sold out of new jets for several years. Only Air Lease Corp. AL -0.77% , a rival started by ILFC founder Steven Udvar-Házy, has a larger order book, disclosing last week that its backlog had climbed to $27.4 billion.
ILFC and Air Lease remain embroiled in a lawsuit related to Mr. Házy's departure from the company he founded. ILFC alleges he and other executives stole trade secrets and other confidential information. Air Lease countersued AIG and ILFC last August, seeking more than $500 million in damages for alleged breach of contract.
By DOUG CAMERON and ANNA PRIOR
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