Aircraft lessor SMBC Aviation nears $7 billion deal for rival Goshawk, sources say

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SMBC Aviation Capital, one of the world’s largest aircraft lessors, is set to strike a deal to acquire its smaller rival Goshawk for around $7 billion, including debt, people familiar with the matter said on Friday.

The deal between the two Dublin, Ireland-based private lessors could be announced as early as next week, the sources said, speaking on condition of anonymity. It would create a global jet leasing giant as consolidation sweeps the industry.

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Last year, the world’s two largest aircraft leasing companies, Ireland’s AerCap and GE’s leasing subsidiary GECAS, merged in a deal worth more than $30 billion.

SMBC Aviation Capital, which is owned by a consortium including Japan’s Sumitomo Corp and Sumitomo Mitsui Financial Group, has a fleet of more than 750 owned, managed and committed aircraft, mostly short-haul Boeing and Airbus models, according to its website.

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Goshawk, which is a 50-50 joint venture between Hong Kong-based conglomerate NWS Holdings Limited and Chow Tai Fook Enterprises Limited, has an owned, managed and committed fleet that consists of 222 aircraft, according to its website.

A spokesperson for SMBC Aviation Capital declined to comment. Goshawk did not immediately respond to a request for comment.

Trade publication AirFinance Journal first reported talks between the two companies in November.

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A wave of deals has reshaped a global airline finance industry that has attracted a huge amount of capital in recent years.

The aviation investment arm of private equity firm Carlyle Group Inc agreed last year to buy aircraft leasing company Fly Leasing Ltd for $2.36 billion including debt. In December, Carlyle’s aviation arm also agreed to buy Irish leasing company AMCK Aviation’s aircraft portfolio.

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