General Electric (NYSE:GE) is nearing a $30 billion-plus deal to combine its aircraft-leasing business with Ireland’s AerCap Holdings, the Wall Street Journal reported on Sunday.
Details of how the deal would be structured was not immediately known, but an announcement is expected Monday, assuming the talks don’t fall apart, the WSJ said.
The unit, known as GE Capital Aviation Services, or GECAS, is one of the world’s biggest jet-leasing companies and leases passenger aircraft made by companies including Boeing (NYSE:BA) and Airbus. It owns, services or has on order about 1,650 aircraft, according to its website.
GE said the company doesn’t comment on rumor or speculation, while AerCap did not immediately respond to Reuters’ request for comment.
Last week, GE Morgan Stanley upped its price target on GE to $17 (from $13), while maintaining an Overweight rating. The catalyst? The company's upcoming investor day on March 10, which analyst Joshua Pokrzywinski classifies as a "starting point for free cash flow over next several years." He also estimates a return to regular profits for GE Aviation, which has been slammed by COVID-19.
The turnaround would happen in 2023 - a year that was described as a "starting point" for sustainable earnings growth.GE already rose 3.5% on Wednesday after UBS pointed to rising interest rates and the coronavirus relief bill as reasons to get more bullish on the company.
GE shares climbed 45 cents, or 3.3%, to $14.05.
