SMBC Aviation Capital to acquire Goshawk Aviation for US$6.7bn – will create second-largest global lessor

Japanese-owned, Dublin-based lessor SMBC Aviation Capital has agreed to purchase similarly Dublin-based global aircraft lessor Goshawk Aviation for an enterprise value of US$6.7bn. The deal, once completed will create the largest Japanese-owned aircraft lessor and the world’s second-largest lessor by dint of total assets exceeding US$37 billion, including those aircraft that will be on its order book currently valued at US$13 billion comprising exclusively new-technology, narrow-body Airbus A320neo and Boeing 737MAX aircraft.

SMBC Aviation Capital is jointly owned by Sumitomo Mitsui Financial Group and Sumitomo Corporation, while Goshawk Aviation is owned by NWS Holdings Limited and Chow Tai Fook Enterprises Limited, both Hong Kong enterprises. The deal will see SMBC Aviation Capital acquire a portfolio of 176 owned and managed aircraft, creating a portfolio of 709 owned and managed aircraft. The 261 planes on order are all new-generation models and subsequently the new portfolio of aircraft will be comprised of 82% narrow-body jets.

Any aircraft currently owned by Goshawk Aviation that are located in Russia and subject to EU sanctions are not included in the transaction. The transaction will be financed through a combination of debt and equity. Debt financing for the transaction will be sourced from the shareholders as well as the bank and capital markets. Equity for the transaction will be provided by SMBC Aviation Capital’s shareholders, Sumitomo Mitsui Financial Group and Sumitomo Corporation.

The combined business will continue to operate as SMBC Aviation Capital and will consist of a single corporate structure incorporated in the Republic of Ireland, with headquarters in Dublin. The transaction is subject to the receipt of relevant regulatory approvals and other closing conditions and is expected to close in the second half of 2022. Goldman Sachs International acted as exclusive financial adviser to SMBC Aviation Capital. Cravath, Swaine & Moore LLP and Milbank acted as the legal advisers to SMBC Aviation Capital. (£1.00 = US$1.25 at time of publication).

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