TOKYO -- Tokyo Century is acquiring a 20% stake in U.S.-based aircraft-leasing company Aviation Capital Group as early as December, with an eye on rising global demand for passenger jets.
The Japanese leasing company on Thursday agreed with Pacific Life Insurance, which currently owns 100% of ACG, to purchase the shares for about 67 billion yen ($595 million) and turn ACG into an equity-method affiliate.
ACG owns about 270 aircraft, many of which are narrow-body planes with fewer than 200 seats. It is looking to expand its fleet to 441.
Tokyo Century, meanwhile, owns 48, and hopes to use the acquisition to brush up its know-how. Midsize planes are widely used in Europe and Asia because they are highly profitable to operate, and will likely be in greater demand in the future.
The market for aircraft leasing is expanding, thanks to economic growth in Asia. But it remains a competitive field as Chinese players gain ground.
Tokyo Century will also consider raising its stake in ACG, as well as creating a fund to attract outside investors.