Private equity firm Apollo Global Management LLC is looking to acquire General Electric Co’s aircraft leasing operations valued at $40 billion, reports citing sources close to the development said on Friday.
GE, which is spinning off its healthcare unit and divesting stake in oilfield services company Baker Hughes, is planning to divest several other assets as well after the industrial conglomerate lost $22.8 billion, mostly from its ailing power unit, in the third quarter.
The aircraft leasing business, GE Capital Aviation Services (GECAS), has a fleet of more than 1,900 planes. GECAS has been facing severe competition from rival AerCap Holdings NV and some Asian competitors.
GECAS is a unit of GE Capital, which GE has been divesting since the 2008 financial crisis. In 2015, GE sold most of its real estate assets to Blackstone Group LP and Wells Fargo & Co for $23 billion.
Apollo is looking at financing the planned buy-out through a mix of debt and equity provided by Athene Holding Ltd, the annuity provider for which it provides asset management services, Apollo’s own private equity funds, co-investment from Apollo’s investors, and loans from banks, reports said.
Apollo is also reported to be looking to acquire GE’s long-term-care insurance business, which is burdened with huge liabilities, according to the reports.
GE, however, has not yet agreed to a deal with Apollo or any other buyer on GECAS, the reports said.
Apollo had, in October, agreed to buy a portfolio of $1 billion in energy investments from GE Capital and, in 2015, it bought a $3.6 billion portfolio of corporate and real estate loans in the United States and Europe from Mubadala GE Capital, a joint venture between Abu Dhabi state fund Mubadala and GE Capital.