Apollo Global Management has agreed to buy easyJet in a deal valuing the European budget airline at approximately £5.7 billion ($7.7 billion). Rival private equity firm Castlelake abandoned its pursuit on Thursday without giving a reason.
The cash offer ends months of uncertainty surrounding one of Europe’s largest low-cost carriers as the industry faces rising costs linked to the war in Iran. EasyJet becomes the latest London-listed company taken private by private equity, continuing a trend of UK firms moving into private ownership while the FTSE 100 trades at a discount to US markets.
Apollo Tops Castlelake’s Bid
Apollo’s £5.7 billion proposal beat Castlelake’s earlier £5.5 billion offer. Castlelake had submitted five bids before Apollo entered the process in July and won the backing of easyJet’s board.
EasyJet founder Stelios Haji-Ioannou confirmed his family’s support:
“Having carefully reviewed the proposal by Apollo, my family members and I have decided to support the recommended acquisition announced by the easyJet board.”
The board, advised by Evercore, unanimously recommended the offer as fair and reasonable. Non-executive chair Stephen Hester said the deal “delivers immediate, certain and attractive value for shareholders.”
Apollo, which manages about $1.05 trillion in assets and has previously invested in Sun Country Airlines, Aeroméxico and Atlas Air, plans to accelerate easyJet’s growth under private ownership — including its fast-expanding holidays business.
EU Ownership Rules Remain a Key Question
Investors and regulators have raised concerns about how Apollo will satisfy European Union airline ownership rules. EasyJet’s flying rights within the EU require the airline to remain majority owned and controlled by EU interests.
Under the proposed structure:
- The Haji-Ioannou family and other remaining shareholders will hold between 45.1% and 49.9% of the ordinary capital
- An EU management trust will hold up to 5%
- Apollo’s funds will hold the rest, capped at a maximum of 49.9%
EasyJet’s main base is in Britain. The UK Civil Aviation Authority confirmed it has engaged with the parties involved in the deal.
Share Price Reaction and Analyst Views
EasyJet shares have risen more than 65% since takeover interest first became public. They closed up 2.7% at 670 pence on Thursday — still below the offer price. The deal represents an 81% premium to the £3.94 closing price on 28 May, the last trading day before Castlelake’s interest emerged.
Aviation analyst James Halstead noted that the current share price reflects market concerns over execution risk linked to ownership and control rules.
Analysts also highlighted potential benefits of privatisation. Andrea Giuricin, CEO of TRA Consulting, said a delisting would free easyJet from quarterly earnings pressure and reduce exposure to turbulence once higher jet fuel costs feed through into fares. Halstead added that Apollo could bring stronger funding and more flexible aircraft leasing arrangements.