New York, NY, United States (4E) – A Chinese investor group is eyeing a 90 per cent stake from the airplane leasing unit of American International Group (AIG) for around $5.3bn, according to AIG which made the announcement on Sunday.
The value of the deal will eclipse the previous record for a Chinese firm investment set by China Investment Corp. when it took over Blackstone Group LP in 2007 for $3bn. Under the deal, the buyers will have an option to buy another 9.9 per cent stake from the company.
AIG has been actively selling its non-core assets, as part of the insurer’s strategy to become a leaner business and emerge from the financial crisis, during which it needed bailout funds from the U.S. government.
International Lease Finance Corp. (ILFC) is a Los Angeles-based firm that leases more than a thousand aircraft to large carriers and other clients from more than 80 countries. An approval by federal regulators is required for the biggest purchase of an American company by a Chinese firm to date.
ILFC is China’s biggest aircraft lessor with a 30 per cent market share and has leased more than 175 aircraft to 16 airline companies in the Greater China Area. AIG Chief Executive Officer Robert Benmosche is trying to get the company to focus more on its insurance business and lower the debt of the company, whose largest investor is the U.S. government.
Among the U.S. regulators that will scrutinize the deal will include the Committee on Foreign Investment.