China’s Bohai Leasing Co (渤海租賃) is to buy Irish jet lessor Avolon Holdings Ltd for US$7.6 billion, according to a statement, as Beijing pushes its companies to search overseas for future growth.
Bohai, a subsidiary of HNA Group (海航集團), which operates Hainan Airlines, is to pay US$31 per share for New York-listed Avolon, a 31 percent premium to its closing price on July 13, the day before Bohai’s interest in a deal was formally announced, Avolon said in a statement on Thursday.
“Avolon 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,” Bohai CEO Chris Jin (金川) said in a statement.
“Our vision at Bohai is to build each of our transportation finance businesses into global leaders,” he said.
Bohai offers aircraft, ships, engineering equipment and other items for lease.
It is the second acquisition by HNA Group or its subsidiaries this week, after the parent company announced it had bought an office building at London’s Canary Wharf housing, the European headquarters for global news agency Thomson Reuters. It gave no value for the deal, but said it marked its first “major” acquisition in the UK capital.
China has encouraged its companies to “go out” and make acquisitions to gain both market access and international experience, while at the same time seeking oil and other raw materials to keep the world’s second-largest economy moving.
At the same time the plunging euro has made eurozone assets cheaper for outside buyers.
Avolon has a fleet of 260 aircraft serving 56 customers and its chairman Denis Nayden said the merger would offer greater exposure to the Chinese market, calling it “one of the most compelling growth opportunities in global aviation over the next two decades.”
The Dublin-based jet lessor’s private-equity backers include Oak Hill Capital Partners, CVC Capital Partners and Cinven Ltd.
The transaction is expected to close by the first quarter of next year.
Asian leasing companies are boosting fleets and expanding across the continent, which is set to overtake the US as the world’s largest plane market in two decades. Economic growth in China, India and Southeast Asia is encouraging more air travel. Hong Kong billionaire Li Ka-shing (李嘉誠) and Malaysian low-fare carrier AirAsia Bhd also entered the aircraft-leasing market last year.
Shares in Bohai, which is listed on China’s Shenzhen exchange, closed down 1.45 percent at 6.82 yuan on Wednesday, the last day of trading this week before a market holiday, while Avolon shares rose 0.4 percent to US$28.68 on Thursday in US trading.
Additional reporting by Bloomberg
CAUTIOUS RECOVERY: While the manufacturing sector returned to growth amid the US-China trade truce, firms remain wary as uncertainty clouds the outlook, the CIER said The local manufacturing sector returned to expansion last month, as the official purchasing managers’ index (PMI) rose 2.1 points to 51.0, driven by a temporary easing in US-China trade tensions, the Chung-Hua Institution for Economic Research (CIER, 中華經濟研究院) said yesterday. The PMI gauges the health of the manufacturing industry, with readings above 50 indicating expansion and those below 50 signaling contraction. “Firms are not as pessimistic as they were in April, but they remain far from optimistic,” CIER president Lien Hsien-ming (連賢明) said at a news conference. The full impact of US tariff decisions is unlikely to become clear until later this month
GROWING CONCERN: Some senior Trump administration officials opposed the UAE expansion over fears that another TSMC project could jeopardize its US investment Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) is evaluating building an advanced production facility in the United Arab Emirates (UAE) and has discussed the possibility with officials in US President Donald Trump’s administration, people familiar with the matter said, in a potentially major bet on the Middle East that would only come to fruition with Washington’s approval. The company has had multiple meetings in the past few months with US Special Envoy to the Middle East Steve Witkoff and officials from MGX, an influential investment vehicle overseen by the UAE president’s brother, the people said. The conversations are a continuation of talks that
CHIP DUTIES: TSMC said it voiced its concerns to Washington about tariffs, telling the US commerce department that it wants ‘fair treatment’ to protect its competitiveness Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday reiterated robust business prospects for this year as strong artificial intelligence (AI) chip demand from Nvidia Corp and other customers would absorb the impacts of US tariffs. “The impact of tariffs would be indirect, as the custom tax is the importers’ responsibility, not the exporters,” TSMC chairman and chief executive officer C.C. Wei (魏哲家) said at the chipmaker’s annual shareholders’ meeting in Hsinchu City. TSMC’s business could be affected if people become reluctant to buy electronics due to inflated prices, Wei said. In addition, the chipmaker has voiced its concern to the US Department of Commerce
STILL LOADED: Last year’s richest person, Quanta Computer Inc chairman Barry Lam, dropped to second place despite an 8 percent increase in his wealth to US$12.6 billion Staff writer, with CNA Daniel Tsai (蔡明忠) and Richard Tsai (蔡明興), the brothers who run Fubon Group (富邦集團), topped the Forbes list of Taiwan’s 50 richest people this year, released on Wednesday in New York. The magazine said that a stronger New Taiwan dollar pushed the combined wealth of Taiwan’s 50 richest people up 13 percent, from US$174 billion to US$197 billion, with 36 of the people on the list seeing their wealth increase. That came as Taiwan’s economy grew 4.6 percent last year, its fastest pace in three years, driven by the strong performance of the semiconductor industry, the magazine said. The Tsai
RSS