This acquisition will help SMBC to better serve the customers in a fast-evolving sector whilst also accelerating the growth and delivering significant value for our shareholders.
SMBC Aviation Capital is all set to acquire its rival Goshawk Aviation for a value of USD 6.7 billion. The transaction brings together two strategically aligned and complementary businesses, creating the largest Japanese-owned aircraft lessor and the second largest global player by the number of aircraft. The enlarged business will benefit from a best-in-class portfolio focused on new technology narrowbody aircraft and an industry-leading funding advantage uniquely positioned to capitalize on opportunities presented by the sector recovery.
Peter Barrett, Chief Executive Officer, SMBC Aviation Capital said, “This is the right transaction for SMBC Aviation Capital, allowing us to better serve our customers in a fast-evolving sector whilst also accelerating our growth and delivering significant value for our shareholders. Goshawk is a high-quality business with assets and people that complement our own. The combined business will continue to have a disciplined focus on young, liquid, most in-demand narrowbody aircraft with one of the most environmentally friendly portfolios of any major leasing company together with 261 new generation, fuel-efficient aircraft on order. We are undertaking this transaction at a strategic point in the cycle with a strong recovery building across the global airline industry and we expect the transaction to be accretive to SMBC Aviation Capital’s return on capital.”
Masaki Tachibana, President, Sumitomo Mitsui Finance and Leasing Co., Ltd. said, “The 2012 acquisition of SMBC Aviation Capital has proven to be very successful and it is now a key strategic business for our group. As we enter this new cycle, SMBC Aviation Capital will be a core component in the growth of our international business. The shareholder is fully supportive of the proposed acquisition of Goshawk, which will further cement the group’s position as a leading player in the aviation financing sector.”
As part of the transaction, SMBC Aviation Capital will acquire a portfolio of 176 owned and managed aircraft. The combined business will have a portfolio of 709 owned and managed aircraft and an additional $13bn of orders from Boeing and Airbus consisting exclusively of 261 new technology narrowbody aircraft. Aircraft owned by Goshawk that are located in Russia are excluded from this transaction.
SMBC will finance the deal through a combination of debt and equity. Young, narrowbody aircraft, which it hopes to drive its growth, will represent over 82% of the combined fleet.
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Dublin-based Goshawk, a 50-50 joint venture between Hong Kong-based conglomerate NWS Holdings Ltd and Chow Tai Fook Enterprises Ltd, was set up less than a decade ago and its shareholders said it was selling at an attractive valuation.
