Bohai Leasing of China to acquire Irish aircraft leasing firm Avolon
04 September 2015
Bohai Leasing of China intends to acquire Irish aircraft leasing firm Avolon in a deal worth $7.6 billion, the companies said.
Under the deal, announced late yesterday, Bohai, owned by the shipping conglomerate HNA Group, would pay Avolon $31 a share in cash, amounting to a 31-per cent premium to Avolon's closing price of $23.73 per share before the Bohai approach to Avolon in July.
Avolon was down to $28.71 yesterday.
''Our vision at Bohai is to build each of our transportation finance businesses into global leaders,'' Chris Jin, the chief executive of Bohai, said in a news release.
''Avalon has delivered remarkable growth over the past five years to become a leading industry franchise with a distinct business model, and the company is a strong complement to our existing investment in the aircraft leasing sector.''
Avolon's chairman, Denis J Nayden, added, ''We believe Bohai will enhance Avolon's profile, positioning and relationships in the Chinese aviation market - a market which we believe offers one of the most compelling growth opportunities in global aviation over the next two decades.''
The deal which would need regulatory approval was expected to close by the first quarter of 2016.
Bohai has already paid a deposit of $75 million and a further $200 million will be paid on 4 September, 2015 while the final $75 million would be paid by 15 September, 2015.
The total $350 million deposit represented approximately $4.25 per Avolon common share and was payable to Avolon in certain circumstances if the transaction was not consummated.
The transaction will be subject to customary conditions, which would include regulatory approvals as also the approval of Avolon and Bohai's shareholders.
To facilitate the approval process, affiliates of CVC Capital, Cinven, Oak Hill Capital, GIC and their repective syndicate investors had agreed to vote their shares in favour of the transaction at the shareholder meeting which would be held for approving the transaction.
HNA Group, Bohai's largest shareholder, had agreed to vote in favour of the transaction. The transaction was not subject to any conditions related to financing or Chinese capital control approvals and the HNA Group had guaranteed the purchase price.