Boston, MA 12/18/2013 (wallstreetpr) – American International Group Inc (NYSE:AIG) last week celebrated the first anniversary of its exit from the government’s bailout loan. The company also this week announced a deal to sell its aircraft leasing business.
American International Group Inc (NYSE:AIG) is expected to fetch $5.4 billion in a transaction for the sale of International Leasing Finance Corp (ILFC). This unit deals with purchasing aircrafts and leasing the same to airlines worldwide. It has been more than four years now as AIG sought to sell this business after it dropped off from its core business list.
ILFC will be sold to a Dutch company called AerCap. The company leases aircrafts to airline carriers. The deal will involve cash and stock of which $3 billion will be cash and $2.4 billion will be in stock. Basically, this means that AIG will be left with 46 percent stake in the business. The deal is expected to close in the 2Q14.
American International Group Inc (NYSE:AIG) expects to improve its credit profile, cash flow and focus on core operations following the disposal of ILFC.
Following the deal’s announcement, the stock of the acquiring firm AerCap jumped by 30 percent while shares of AIG gained 1 percent on the news. The stock is up 36 percent so far in the year.
Analysts are warning that the stock will not soar even after the sale of the aircraft leasing unit. There are underlying factors which would deny the stock the energy required to rally up.
However, as the company tries to get back on its feet, stakeholders will have more money returned to them in form of shares repurchase and dividend. The exit of the government from AIG control frees the insurer to reward its shareholders.
American International Group Inc (NYSE:AIG) is a leading insurer in the U.S. offering various financial and risk coverage solutions. The company is valued at $72.87 billion and it has 1.47 billion outstanding shares after buying the government out of its stake.
