SMBC Aviation Capital to acquire Goshawk Aviation for Enterprise Value of $6.7bn

May 16, 2022: SMBC Aviation Capital, one of the world's leading aircraft leasing companies, has today announced that it has reached agreement with NWS Holdings Limited and Chow Tai Fook Enterprises Limited to acquire Goshawk Aviation (“Goshawk”), the Dublin-based global aircraft lessor.

The transaction brings together two strategically aligned and complementary businesses, creating the largest Japanese-owned aircraft lessor and the second largest global player by number of aircraft. The enlarged business will benefit from a best-in-class portfolio focused on new technology narrowbody aircraft and an industry leading funding advantage uniquely positioned to capitalise on opportunities presented by the sector recovery.

As part of the transaction, SMBC Aviation Capital will acquire a portfolio of 176 owned and managed aircraft. The combined business will have a portfolio of 709 owned and managed aircraft and an additional $13bn of orders from Boeing and Airbus comprising exclusively of 261 new technology narrowbody aircraft. Aircraft owned by Goshawk that are located in Russia are excluded from this transaction.

Peter Barrett, Chief Executive Officer, SMBC Aviation Capital said, “This is the right transaction for SMBC Aviation Capital, allowing us to better serve our customers in a fast-evolving sector whilst also accelerating our growth and delivering significant value for our shareholders. Goshawk is a high-quality business with assets and people that complement our own. The combined business will continue to have a disciplined focus on young, liquid, most in demand narrowbody aircraft with one of the most environmentally friendly portfolios of any major leasing company together with 261 new generation, fuel efficient aircraft on order.

We are undertaking this transaction at a strategic point in the cycle with a strong recovery building across the global airline industry and we expect the transaction to be accretive to SMBC Aviation Capital’s return on capital.”

Masaki Tachibana, President, Sumitomo Mitsui Finance and Leasing Co., Ltd. said, “The 2012 acquisition of SMBC Aviation Capital has proven to be very successful and it is now a key strategic business for our group. As we enter this new cycle, SMBC Aviation Capital will be a core component in the growth of our international business. The shareholder is fully supportive of the proposed acquisition of Goshawk, which will further cement the group’s position as a leading player in the aviation financing sector.”

Transaction Overview

Under the terms of agreement, SMBC Aviation Capital will acquire Goshawk Management (Ireland), Goshawk’s Irish-incorporated operating entity together with associated corporate assets for an enterprise value of $6.7bn. The consideration will be subject to customary closing adjustments.

The transaction will be financed through a combination of debt and equity. Debt financing for the transaction will be sourced from the shareholders as well as the bank and capital markets. Equity for the transaction will be provided by SMBC Aviation Capital’s shareholders, Sumitomo Mitsui Financial Group and Sumitomo Corporation.

The combined business will continue to operate as SMBC Aviation Capital and will consist of a single corporate structure incorporated in the Republic of Ireland, with headquarters in Dublin. The transaction is subject to the receipt of relevant regulatory approvals and other closing conditions and is expected to close in the second half of 2022.

Delivering benefits for shareholders and customers

The transaction will deliver significant benefits for SMBC Aviation Capital’s shareholders and the customers of both businesses:

• The combination of SMBC Aviation Capital and Goshawk will create a business with total assets of c. $37bn, including orders worth $13bn comprising exclusively new technology, narrowbody Airbus A320NEO and Boeing 737MAX aircraft.
• The combined business will be the second largest leasing company (by number of aircraft) globally and the largest Japanese owned aircraft lessor.
• The acquisition adds 24 airlines that are currently not customers of SMBC Aviation Capital.
• The acquisition enhances SMBC Aviation Capital’s ability to provide innovative solutions to customers and to support the transition of the sector to new technology aircraft.
• The transaction will allow SMBC Aviation Capital to accelerate its growth through acquiring a high quality, narrowbody focused portfolio and generate strong profitability for its shareholders in the coming cycle.
• The acquisition provides scale and an industry leading position whilst maintaining the strongest portfolio quality in the industry.
• Portfolio well suited to the shape of the recovery in airline travel, with narrowbody aircraft comprising 82% of the combined aircraft fleet by Net Book Value. The transaction perimeter does not include any aircraft owned by Goshawk that are located in Russia and subject to EU sanctions.
• Industry leading funding advantage and balance sheet strength will facilitate the investment in new technology aircraft that will help airlines and the wider aviation sector meet environmental sustainability goals.

Goldman Sachs International acted as exclusive financial adviser to SMBC Aviation Capital. Cravath, Swaine & Moore LLP and Milbank acted as the legal advisers to SMBC Aviation Capital.

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For more information, please contact:

Conor Irwin, SMBC Aviation Capital                                                   +353 87 381 6106
Dara O’Sullivan, SMBC Aviation Capital                                            +353 86 021 0135   

Charles O’Brien, Finsbury Glover Hering                                           +44 20 7251 3801
Richard Webster-Smith, Finsbury Glover Hering                               +44 20 7251 3801

For Investor enquiries, please contact:

Mark Allen, SMBC Aviation Capital                                                    +353 87 226 3622

Note to Editors

About SMBC Aviation Capital 

Based in the IFSC in Dublin Ireland, SMBC Aviation Capital is one of the world’s leading aircraft operating lease companies. In operation since 2001, SMBC Aviation Capital has an owned and managed fleet, comprising 720 owned, managed and committed aircraft.  Established in 2001, the company was acquired in 2012 by a consortium comprising of two of Japan’s biggest companies SMFG and Sumitomo Corporation.  For further information go to https://www.smbc.aero/

About Goshawk

Goshawk Aviation Limited is a top ten global aircraft lessor with an owned, managed and committed fleet of 216 aircraft. Formed in 2013, the business has quickly grown to become one of the premier global aircraft leasing companies building a high-quality portfolio of young new technology aircraft placed on long leases to airlines globally. Goshawk is headquartered in Dublin and owned by each of Chow Tai Fook Enterprises Limited and NWS Holdings Limited, two Hong Kong based enterprises.

About NWS Holdings Limited

NWS Holdings Limited (Hong Kong Stock Code: 659), as the diversified industries flagship of New World Development Company Limited (Hong Kong Stock Code: 17), invests and operates a wide range of businesses predominantly in Hong Kong and the Mainland. Our core business includes toll roads, commercial aircraft leasing, construction and insurance, while we also manage a strategic portfolio spanning sectors from logistics to facilities management.

About Chow Tai Fook Enterprises Limited

Chow Tai Fook Enterprises Limited (“CTFE”) is the flagship private investment holding company of the Cheng Family who is the controlling shareholder of the Chow Tai Fook Jewellery Group Limited (Hong Kong stock code: 1929) founded in 1929, one of the world’s leading jewellery retailers with approximately US$8.9 billion revenue in the financial year ended in March 2021. 

The Cheng Family’s businesses focus on jewellery, property development, hospitality services, infrastructure, energy, healthcare, education, technology, environmental services, retail and media.

CTFE seeks to deliver sustainable growth through professional investing and upholding relationship driven philosophy of family-owned businesses. CTFE is a premier family investor with strategic investments in energy, healthcare, education and media; marquee investments in prime real estate and hospitality services; private equity investments in quality growth companies mainly in the technology sector and a liquid portfolio of equities and bonds.  CTFE is also the largest shareholder of New World Development Company Limited (Hong Kong stock code: 17), a constituent stock of the Hong Kong Hang Seng Index with assets of over US$81 billion as of December 2021. CTFE, together with its subsidiaries and jointly controlled entities, has operations in 27 countries globally.