American investment fund Apollo has secured board approval to buy British budget airline EasyJet for 6.7 billion euros after rival Castlelake withdrew its offer. EasyJet announced the agreement on Thursday, ending two months of bidding negotiations between the two American firms.
Apollo confirmed the acquisition shortly after Castlelake withdrew from the process. In a statement, Apollo said it had tracked EasyJet for many years and described the carrier as one of the most attractive companies in global aviation, praising its leading brand, extensive network, and solid positions in attractive markets.
EasyJet is Europe's second-largest low-cost airline behind Ryanair. The carrier attracted interest from several investors due to its valuable airport slots, strong brand recognition, and future growth prospects. EasyJet previously reached an agreement in principle with Apollo in early July before the private equity firm submitted a firm purchase offer.
Fuel costs and Middle East conflict
The acquisition comes during a challenging financial environment for low-cost passenger carriers. EasyJet reported that higher kerosene fuel prices linked to the war in the Middle East caused its pre-tax profit to drop by 70 percent in its offset third quarter, falling to 85 million pounds.
EasyJet previously criticized initial takeover offers from Castlelake as highly opportunistic. Company management stated that those earlier proposals sought to exploit a share price that was temporarily depressed by ongoing geopolitical conflict in the Middle East.
AJ Bell financial analyst Danni Hewson said the acquisition price offered by Apollo represented a significant premium over EasyJet's stock valuation before the war in Iran. However, Hewson noted that the transaction value remained well below peak share levels recorded before the Covid-19 pandemic.
EasyJet highlighted the growth of its holiday tour division, EasyJet Holidays, as a key operational pillar that helped persuade Apollo to move forward with the takeover offer.
Deal structure and regulatory limits
The acquisition of EasyJet is scheduled to be completed in early 2027. Under the terms of the deal, shareholders will have the option to exchange their current shares for equity stakes in a new holding company created to control the airline.
EasyJet founder Stelios Haji-Ioannou, who holds a 15.3 percent stake in the airline's capital, agreed to accept the share exchange option in order to retain an ownership interest in the business.
Apollo will cap its ownership stake at 49.9 percent to comply with British and European Union regulations regarding foreign ownership of airlines. A European trust will hold up to 5 percent of the airline's remaining shares.
