General Electric is reportedly close to merging its jet-leasing unit GE Capital Aviation Services with Ireland's AerCap Holdings NV.
If the two companies do reach a deal, the combined entity will become one of the world's largest aircraft financiers.
Sources with knowledge in the matter said that the two companies could make an announcement as soon as this week. The Wall Street Journal said that the deal could be valued at more than $30 billion, with the combined company operating more than 3,000 aircraft.
The alleged sale of its jet-leasing business is GE's latest action to streamline its operations. GE Chief Executive Officer Larry Culp previously said that he plans to completely transform the industrial icon by focusing more on its profitable business units. Last year, GE had successfully sold its biopharmaceutical business to Danaher Corporation for $21.4 billion.
"The old world where you needed a leasing company to support your manufacturing is gone. For AerCap, this could be something that's too good to refuse," Bloomberg analyst, George Ferguson, said in a statement.
Both GE and AerCap have declined to comment on the reports of the merger. The exact details of the alleged deal are still mostly speculation.
The supposed sale is the latest divestment under Culp's leadership and part of his broader turnaround effort after the 2018 collapse that wiped out more than $200 billion from the company's market value.
In 2019, GE unloaded a number of major assets to repay its bloated debt load and shore up its finances. GE sold its aircraft-financing business to Athena Holding and Apollo Global Management for $3.6 billion. In the same year, GE said that it was going to be selling its stake in oilfield-services provider Baker Hughes.
The asset sales had provided GE with critical cash, while also helping it cut its debt by more than $30 billion. By the end of 2020, GE had an outstanding debt of around $75 billion.
Since the start of the year, GE's share price had jumped by more than 26% following a 3.2% drop in 2020. AerCap's share price has increased by around 11% so far this year following a 26% drop last year.
