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AMERICAN INTERNATIONAL GROUP, INC. 8-K Report, Material Agreement (Dec 16, 2013)

Filed December 16, 2013For Securities:AIG

Summary

American International Group, Inc. (AIG) has announced a significant divestiture of its aircraft leasing subsidiary, International Lease Finance Corporation (ILFC). On December 16, 2013, AIG entered into a definitive agreement to sell 100% of ILFC's common stock to AerCap Holdings N.V. (AerCap) for a total transaction value of approximately $5.4 billion. The consideration includes $3.0 billion in cash, a $600.0 million special dividend from ILFC to AIG, and approximately 97.6 million shares of AerCap common stock, which will result in AIG holding about 46% of AerCap upon completion. This transaction marks a strategic shift for AIG as it continues to streamline its operations and exit non-core businesses. The sale is subject to regulatory approvals, including CFIUS and antitrust agencies, as well as AerCap shareholder approval, with a target closing date of September 16, 2014. Concurrently, AIG terminated its previous agreement to sell up to 90% of ILFC to Jumbo Acquisition Limited, as that transaction did not close. AIG has also entered into a credit agreement to provide a $1.0 billion revolving credit facility to AerCap Ireland, available upon closing of the ILFC sale.

Key Highlights

  • 1AIG to sell 100% of International Lease Finance Corporation (ILFC) to AerCap Holdings N.V. for approximately $5.4 billion.
  • 2Transaction consideration includes $3.0 billion in cash, a $600 million special dividend, and 97.6 million shares of AerCap common stock.
  • 3Upon closing, AIG will hold approximately 46% of AerCap's common stock.
  • 4Sale is subject to customary closing conditions, including regulatory approvals (CFIUS, antitrust) and AerCap shareholder approval.
  • 5AIG has terminated its prior agreement to sell up to 90% of ILFC to Jumbo Acquisition Limited.
  • 6AIG will provide a $1.0 billion revolving credit facility to AerCap Ireland, available upon closing of the ILFC transaction.
  • 7AIG will have board representation rights at AerCap based on its ownership stake.

Frequently Asked Questions

The main event is the entry into a definitive agreement by AIG to sell its aircraft leasing subsidiary, International Lease Finance Corporation (ILFC), to AerCap Holdings N.V. for approximately $5.4 billion.

The total transaction value is approximately $5.4 billion. AIG will receive $3.0 billion in cash, a $600 million special dividend from ILFC, and 97,560,976 shares of AerCap common stock.

Upon completion of the transaction, AIG is expected to hold approximately 46% of AerCap's common stock.

The closing is subject to customary conditions, including the receipt of approvals from certain regulatory bodies (such as CFIUS and antitrust agencies) and approval from AerCap shareholders. The agreement has a 'Long-Stop Date' of September 16, 2014, with a potential extension.

AIG exercised its right to terminate the previous agreement to sell up to 90% of ILFC to Jumbo Acquisition Limited because the closing did not occur by the specified date. This termination occurred prior to AIG entering into the agreement with AerCap.