AIG to Sell Aircraft Leasing Business, Honeywell to Buy Intermec

Arthi Gupta
10 Dec, 2012
New York City

AIG agreed to sell up to a 90% stake in ILFC for $5.28 billion. Ingersoll-Rand plans to spin-off its commercial and residential security businesses. Honeywell agreed to acquire Intermec for $600 million.

[R]1:05 PM New York – AIG agreed to sell up to a 90% stake in ILFC for $5.28 billion. Ingersoll-Rand plans to spin-off its commercial and residential security businesses. Honeywell agreed to acquire Intermec for $600 million.[/R]

U.S. indexes traded higher after China reported stabilizing industrial production and Italian prime minister announced his resignation.

Investors look ahead to Fed meeting ending on Wednesday and expect the central bank to continue its program to buy Treasury bonds and mortgage bonds. Fed is expected to keep its program to buy $40 billion of mortgage-backed securities and $45 billion of Treasury securities a month.

The European indexes closed lower after Italian premier Mario Monti planned to resign ahead of the schedule after former Premier Silvio Berlusconi’s party withdrew support.

Italy is scheduled for new elections in February and Democratic Party leader Pier Luigi Bersani is likely to lead the next government according to recent opinion polls. Bersani said he will continue the policies put in place by Prime Minister Monti.

The next government will confront record unemployment, shrinking economy and record government deficit that has ballooned to 126% of gross domestic product.

Asian markets closed higher.

In Asian news, China''s exports rose 2.9% annually in November, following the 11.6% gain in October, data from the General Administration of Customs showed. Imports remained unchanged and the trade surplus was $19.64 billion.

Separately, industrial output rose 10.1% from a year ago in November after 9.6% increase in October. Retail sales grew 14.9% annually in November.

Japan entered into a recession with the gross domestic product contracting at an annualized rate of 3.5% in the third quarter, revised estimates from the Cabinet Office showed today.

AIG to Sell ILFC Stake

American International Group, Inc. agreed to sell up to a 90% stake in International Lease Finance Corporation to an investor group led by Mr. Weng Xianding, the Chairman of New China Trust Co. Ltd. in a transaction that values ILFC at approximately $5.28 billion.

The investor group agreed to acquire 80.1% of ILFC for approximately $4.23 billion, with an option to acquire an additional 9.9% stake. AIG will retain at least a 10% ownership stake in ILFC after the closing of the transaction.

Standard Chartered Settles Iranian Charges

Standard Chartered agreed to pay $327 million to Federal Reserve for past violations of sanctions laws in connection with certain former payment practices processed on behalf of Iranian parties and other sanctioned entities from other countries like Burma, Sudan and Libya.

Ingersoll-Rand to Spin Off Businesses

Ingersoll-Rand plc said that its board of directors approved a plan to spin off its commercial and residential security businesses. The separation will result in two standalone companies: Ingersoll Rand and a new security company.

The company expects the spin-off, which is intended to be tax free to shareholders, to be completed in approximately 12 months.

Intermec to Be Acquired by Honeywell

Honeywell International Inc. agreed to acquire Intermec for $10 per share in an all-cash transaction valued at approximately $600 million, net of cash and debt acquired.

The transaction represents a 48% premium to Intermec''s closing stock price on November 1 and is expected to close by the end of the second quarter 2013.

Earnings Review

American International Group, Inc. ((AIG)), the insurer estimates after-tax losses related to Superstorm Sandy, net of reinsurance, will total about $1.3 billion and will be reflected in its fourth quarter results.

Ferrellgas Partners, L.P. ((FGP)), the propane distributor reported first quarter revenues declined 33% to $362.9 million from last year. Net loss in the quarter narrowed to $17.8 million or $0.22 per unit from $32.9 million or $0.42 per unit.

John Wiley & Sons Inc. ((JWA)), the publisher reported second quarter revenue slipped 3% to $431.76 million from the prior-year quarter. Net income in the quarter fell 15% to $43.06 million or 71 cents per diluted share compared with $50.78 million or 83 cents per share last year.

McDonald''s Corporation ((MCD)), the foodservice retailer reported global comparable sales increased 2.4% in November.

PriceSmart, Inc. ((PSMT)), the membership shopping warehouse clubs operator said November net sales increased 13.2% to $183.7 million from $162.3 million in the comparable period last year.