Photo by Paul Nelhams on Flickr

General Electric Company (GE) is nearing a deal valued at more than $30 billion to combine its aircraft-leasing business with Ireland-based AerCap Holdings N.V. (AER), the Wall Street Journal reported Sunday, citing people familiar with the matter.

What Happened: According to the WSJ report, a deal is expected to be announced Monday if the talks don’t fall apart. GE’s aircraft leasing business, known as GE Capital Aviation Services or GECAS, leases aircraft to customers ranging from airlines to startups. The business owns, services or has on order about 1,650 aircraft, according to its website.  

AerCap has a market capitalization of $6.6 billion. The aircraft leasing company, which serves about 200 customers in about 80 countries, recently reported that its fiscal 2020 lease revenue declined more than 9% from the prior year to $4.49 billion.

Why It Matters: GECAS is the biggest remaining unit of GE Capital, the financial services arm of General Electric that long accounted for about half of the company’s profits.

However, GE Capital was hurt by the 2008 financial crisis and GE said in 2015 that it will sell a major chunk of GE Capital. A deal for GECAS would result in a further shrinking of GE Capital and help bolster General Electric’s balance sheet.

The potential deal also comes as the aviation industry has been battered by the COVID-19 pandemic, with airlines seeking to either put off lease payments or purchase of new aircraft amid the sharp drop in global air travel.  

Price Movement: Shares of General Electric closed about 0.3% higher on Friday at $13.60, while AerCap closed 1.6% higher at $50.80.