AerCap – 3 Reasons the AIG Deal Sent AER Stock Soaring

by Robert Martin | December 16, 2013 9:52 am

AerCap (AER[1]) is off to the races this morning, with shares of AER stock up almost 35% from Friday’s close and now worth more than twice what they were at the start of the year.

boeing777 300x217 AerCap   3 Reasons the AIG Deal Sent AER Stock SoaringThe main reason investors were so excited about AER stock this morning? Well, AerCap made a big-time acquisition of a big-time rival. The integrated global aviation company is buying International Lease Finance Corporation from American International Group (AIG[2]) for $5 billion.

That payment will come in $3 billion cash and $2 billion worth of its own shares. AerCap will also assume ILFC’s debt, while AIG will have a 46% stake in AerCap when the deal closers.

AerCap Could Just Keep Climbing

But that’s just the headline. Digging deeper, why is the deal is promising for AerCap investors in AER stock. Well, a few reasons top the list:

Even better for folks who have been AER stock holders for some time? AerCap was doing just fine ever before the deal.

This year started with a slow and steady climb, as AER stock marched from just under $14 on Jan. 1 to just over $20 by mid-December. Then, late last week, news surfaced that AIG was in talks to sell its jet-leasing finance to AerCap. On that rumor alone, AER stock shot up by double-digits.

Now that the deal between AerCap and AIG is final, anyone who has been in AER stock since Jan. 1 has a 145% gain in the books. And anyone who has stuck with AER stock since the depths of the Great Recession has watched shares exploder by over 1,000%.

A few other facts AER stock investors should know about the deal, courtesy of The Financial Times[4]:

Other big winners in early Monday trading included Harvest Natural Resources (HNR[7]), Five Star Quality Care (FVE[8]) and Acelrx Pharmaceuticals (ACRX[9]).

As of this writing, Robert Martin did not hold a position in any of the aforementioned securities.

Endnotes:
  1. AER: http://studio-5.financialcontent.com/investplace/quote?Symbol=AER
  2. AIG: http://studio-5.financialcontent.com/investplace/quote?Symbol=AIG
  3. The Wall Street Journal: http://online.wsj.com/news/articles/SB10001424052702304858104579261912583367596
  4. The Financial Times: http://www.ft.com/intl/cms/s/0/2b2b5dca-6645-11e3-8675-00144feabdc0.html#axzz2neDa15YM
  5. GE: http://studio-5.financialcontent.com/investplace/quote?Symbol=GE
  6. BA: http://studio-5.financialcontent.com/investplace/quote?Symbol=BA
  7. HNR: http://studio-5.financialcontent.com/investplace/quote?Symbol=HNR
  8. FVE: http://studio-5.financialcontent.com/investplace/quote?Symbol=FVE
  9. ACRX: http://studio-5.financialcontent.com/investplace/quote?Symbol=ACRX

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