Bohai Leasing To Buy Avolon For USD$2.5 Bln

Irish aircraft leasing firm Avolon has agreed to be acquired for about USD$2.5 billion by Bohai Leasing, a unit of Chinese aviation and shipping conglomerate HNA Group.

Avolon shareholders will receive USD$31 per share in cash, which is lower than the USD$32 per share the companies were discussing in August. Avolon said the lower price was a result of "significant volatility across global equity markets."

The deal, which including the assumption of debt has a total enterprise value of about USD$7.6 billion, is expected to close by first quarter of 2016.

Chinese lessors, mostly backed by state-owned banks, have been expanding in recent years as large carriers such as Hainan Airlines, Air China, China Eastern Airlines and China Southern Airlines launch more routes at home and overseas.

Bohai Leasing initially offered to buy 20 percent of Avolon for USD$26 per share in July, but later decided to purchase the entire company after learning of a rival bid for Avolon.

Bohai Leasing entered into exclusive talks with Avolon in August after raising its offer to USD$32 per share.

Avolon, founded by leasing entrepreneurs Domhnal Slattery and John Higgins in 2010, went public last December.

The company owned or managed 152 aircraft at the end of June and had over 100 more on order.