New | HNA boosts global ambitions with one of China's largest deals for cargo handler Swissport
Unit Bohai Leasing makes offer to buy Irish rival Avolon for US$2.55 billion
HNA Group is making aggressive moves to build an international transport empire with back-to-back deals from Switzerland to Ireland.
After its 2.7 billion Swiss franc acquisition of global air cargo handler Swissport on Thursday, on Friday night HNA unit Bohai Leasing made an offer to buy Irish rival Avolon for US$2.55 billion – a 55 per cent premium over its December initial public offering.
The offer comes just two weeks after Bohai Leasing agreed to buy a 20 per cent stake in Avolon at US$26 per share for US$429 million.
Avolon said it was considering Bohai’s revised US$31 per share offer and a US$30 per share bid from an unidentified bidder and was in contact with both parties.
Bohai offered to buy the whole company when it was informed of the third party bid.
“Avolon’s board of directors has not accepted or rejected either offer and continues to carefully evaluate these … and has authorised its financial advisors to continue negotiations with both,” Avolon said.
The purchase would boost HNA’s access to a global aircraft leasing market dominated by GE Capital and AerCap Holdings.
Before Avolon’s IPO, China Investment Corp and AVIC Capital were in talks to acquire Avolon.
The bid for Avolon comes a day after HNA acquired Swissport, the largest company of its kind serving more than 270 airports worldwide. That deal is expected to close within the year pending regulatory approval, the two companies said.
“We are pleased to become part of HNA Group,” said Thomas Staehelin, chairman of the Zurich-headquartered company after the deal on Thursday.
The firm provides passenger services and cargo handling in 48 countries totalling 4.1 million tonnes a year – nearly matching the 4.38 million cargo throughput in Hong Kong, the world’s busiest air cargo hub.
The deal is the largest to date from the mainland China aviation and shipping group in an aggressive international expansion. In the first half, it has made public plans to raise more than 50 billion yuan through private placements, according to exchange announcements by its listed units.
Greg Waldron, Asia managing editor of aviation intelligence provider Flightglobal, said: “The deal shows the increasing willingness for Chinese airlines and aerospace companies to look abroad for opportunities. It’s a major development for China’s airlines.”
According to its website, Swissport operates in the busy cargo bases of Seoul and Tokyo in Asia but has no business in China except being a minor shareholder in Hong Kong groundhandler Jardine Aviation Services.
HNA vice-chairman Tan Xiangdong said HNA’s network would help Swissport expand in emerging markets including China.
Swissport has changed hands a number of times since British firm Candover bought it from original owner Swissair in 2002. Pai bought it from the next owner Spanish firm Ferrovial for 900 million francs in 2011.
HNA has been on a spending spree in aviation after acquiring marine container leasing firms GE SeaCo for US$1 billion in 2011 and container lessor Cronos for 3.7 billion yuan last year.
