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AVIC acquires USA companies to manufacture aircrafts grade carbon fiber material

News International-French

1 Feb 2013

China will actively use its US $3 trillion foreign exchange reserves to invest in a number of industries. In the field of civil aviation, China is focusing on multiple formats of parts manufacturing, material production, leasing business, and air freight and airport operation.

China hopes to achieve self-sufficient and self-contained for its domestic civil aviation market. The domestic manufacturing supply will promote the development of long-range missiles and other aviation project, and accelerate its military modernization.

In China, aviation industry manufacturers have a deep connection with the military.

As the major signing supplier of the Chinese air force, Aviation Industry Corporation of China (AVIC) has set up a private equity fund (AVIC Industry Fund) for the acquisition of dual-use technology companies with an investment of up to US $3 billion.

AVIC has obtained the small aircraft production qualification in Oregon, the United States. The carbon fiber composite material it used is of lightweight but strong, the material is also used in high performance fighters.

According to an agreement reached, AVIC Industry Fund has joined a financial bid group including New China Trust Co., Ltd and P3 Investments Ltd to pay $4.23 billion for an initial 80.1% of American International Group Inc.'s (AIG) International Lease Finance Corp (ILFC) with the option of purchasing right of the other 9.9%.

The deal is expected to close in the second quarter of 2013. ILFC is evaluated as a price of US $ 5.28 billion.

If that option is exercised and once Chinese regulatory approvals are obtained, New China Life Insurance Co. Ltd. and a unit of ICBC International Holdings Ltd. plan to join the bid group, however, it was denied by an officer from CIBC.

Original language Chinese