Under pressure from activist investors, CIT Group (CIT - Get Report) on Thursday agreed to sell its commercial aircraft leasing business to a division of China's Bohai Capital Holding in a $10 billion deal that will be followed up with capital distributions of up to $3.3 billion.

CIT Group's shares spiked upwards in aftermarket trading by 5.77% to $36.40 on news of the deal. Specifically, CIT Group said it sold the business to Avolon Holdings, which is an international aircraft leasing company and subsidiary of Bohai Capital, as part of its effort to become a top national middle-market bank. As part of the plan, CIT also will repurchase about $6 billion in unsecured debt.

CIT Group CEO Ellen Alemany said that the deal represents a premium of 6.7% of net assets. "The sale will enable us to return more than one-third of our tangible common equity to shareholders and improve our risk profile as we simplify our business and decrease our unsecured debt," Alemany said on a call with analysts.

According to a press release, CIT has received approval from the Federal Reserve to return $2.98 billion in common shares from the sale proceeds upon its consummation, including share buybacks and special dividends. The deal is expected to close by the end of the first quarter of 2017.

The sale comes after Alemany told analysts in May that CIT's No. 1 priority in the coming months was to either complete a sale or spinoff of its commercial-air business. In addition, Alemany said in March that her intention was to use some proceeds from a potential sale of CIT Commercial Air to buy back stock.

"The sale of CIT Commercial Air represents an important milestone for CIT and follows an extensive dual-track process that was designed to maximize shareholder value," Alemany said in a statement. "This transaction will strengthen our balance sheet, simplify our business and enable us to return significant capital to our shareholders."

A group of investors including an activist fund have been pressing CIT to sell off assets and use the proceeds to buy back shares in a move that they believe eventually could also significantly reduce its substantial regulatory burden in Washington.

Activist funds, including Hudson Executive Capital, according to people familiar with the situation, have been urging CIT Group to sell both its commercial air leasing business as well as its rail leasing business.

The combined sale of both of those units would reduce its asset size to below $50 billion, which would eliminate its costly status as a "Systemically Important Financial Institution," or SIFI. In addition to tough capital and liquidity rules, SIFI regulation subjects CIT Group to costly and time-consuming Federal Reserve stress tests to see if they can survive a future financial crisis. CIT Group is on the smaller end of the group of SIFI banks and faces a disproportionately higher cost of compliance.

However, CIT Group has said in recent months that it is not interested in selling its rail business despite pressure to do so from activist investment firms.

CIT Group employed JPMorgan Chase as its exclusive financial adviser while Bank of America Merrill Lynch provided capital markets structuring advice. Wachtell, Lipton, Rosen & Katz served as legal counsel to CIT Group and Sullivan & Cromwell LLP provided bank regulatory advice.