AIG announced that it has entered into an agreement under which AIG will sell its 100% interest in International Lease Finance (ILFC), a non-core asset, to AerCap Holdings. Total consideration for the transaction, consisting of $3.0 billion of cash and 97,560,976 newly issued AerCap common shares, has a value of approximately U.S. $5.4 billion based on AerCap’s closing price per share of $24.93 on December 13, 2013.

The transaction, which is expected to close in the second quarter of 2014, marks the last major disposition of AIG’s non-core assets. Prior to entering into the agreement with AerCap, AIG terminated the share purchase agreement with Jumbo Acquisition Limited for the sale of up to 90% of the common stock of ILFC.

Aengus Kelly, chief executive officer of AerCap, commented, “AerCap’s acquisition of ILFC will create the leading global franchise in the aircraft leasing industry. This transaction presents a unique strategic opportunity to bring together the outstanding and experienced personnel from both companies and two attractive portfolios of modern aircraft on lease to a highly diversified customer base. Further, we believe AerCap will now have the most attractive order book in the industry. With these combined resources, along with a strong liquidity profile, we will drive high levels of stable long-term profitability and cash flows for the benefit of all our stakeholders.”

Henri Courpron, chief executive officer of ILFC, said “I am proud of the hard work and leadership demonstrated by the ILFC team over the last four years. Raising the organization to an investment-grade-rated company with a best-in-class order book and a solid balance sheet was a formidable journey that brought us to this promising combination with AerCap. Becoming the number one lessor in the world is a just reward for all this work.”

“This transaction creates a strong foundation for ILFC and positions it for continued market leadership and strategic growth,” said Robert H. Benmosche, president and chief executive officer of AIG. “ILFC is a valuable business, and AIG has always taken great pride in ILFC’s reputation for innovation, its pioneering role in aircraft leasing, its industry-leading team of employees, and its consistent and successful market leadership. The combination of AerCap’s young fleet of in-demand aircraft and proven portfolio management capabilities with ILFC’s attractive order book and broad marketing reach will continue to lead the industry. However, as we have said all along, the aircraft leasing business is not core to our insurance operations. Upon completion, the transaction will have a positive impact on AIG’s liquidity and credit profile and will enable us to continue to focus on our core insurance businesses.”

To read the entire AIG news release, click here.