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Chinese Group Buys 80% of AIG Plane Unit for $4.2 Billion

Zachary Tracer & Cathy Chan
Bloomberg [1]
December 10, 2012

A Chinese group agreed to buy 80.1 percent of American International Group Inc. (AIG) [2]’s plane-leasing unit [3] for $4.23 billion in the nation’s largest acquisition of a U.S. company.

The International Lease Finance Corp. acquirers, led by New China [4] Trust Co. Chairman Weng Xianding, have an option to buy another 9.9 percent, New York-based AIG said today in a statement. The transaction, which values ILFC at $5.3 billion, passes China Investment Corp.’s $3 billion purchase of a stake in Blackstone Group LP (BX) [5] in 2007 as the biggest Chinese-U.S. deal.

The acquisition gives the group control of the world’s second-largest aircraft lessor as rising travel in China and Asia [6] spurs demand for planes. AIG, which counts the U.S. government as its largest investor, is selling the Los Angeles- based unit as Chief Executive Officer Robert Benmosche [7] focuses on insurance operations and works to reduce debt.

“This ILFC deal squarely places the leasing business where future growth will be,” said Will Horton, a Hong Kong-based analyst at CAPA Centre for Aviation. “There are large opportunities in China, but also in countries like Indonesia [8] andMalaysia [9].”

Full article here [1]