Avolon Holdings, part of China's acquisitive HNA Group, has agreed to buy the aircraft leasing business of CIT Group for $10 billion to create the world's third-largest aircraft leasing company.
Avolon said it will pay $10 billion for the $9.4 billion net asset value of CIT Group's leasing unit, representing a premium of 6.7%.
The deal will be funded by a combination of Avolon's cash, new equity contributed by HNA Group-controlled Bohai Leasing and debt financing of $8.5 billion.
AerCap Holdings and General Electric's Capital Aviation Services are the world's leading aircraft lessors.
The deal comes after Reuters reported in September that Avolon was nearing a purchase of CIT's aerospace assets.
The assets were also being pursued by China's Ping An Insurance Group's aircraft leasing arm, and Century Tokyo Leasing - a joint venture partner of CIT.
Avolon's deal builds on a series of acquisitions made by Chinese aviation and shipping conglomerate HNA Group in recent years as it bulks up its global presence.
The latest transaction will double the scale of Avolon, the company's chief executive Dómhnal Slattery said.
The combined entity will have a fleet of 910 aircraft valued at over $43 billion, Avolon said in a statement.
CIT Group's aircraft leasing business had total assets of $11.1 billion and liabilities of $1.7 billion as of June 30. The deal is expected to close in the first quarter of 2017.
