EasyJet has agreed to a takeover deal worth approximately £5.7bn, or $7.7bn, with US-based investment giant Apollo Global Management (APO).
The agreement ends months of uncertainty surrounding one of Europe’s largest low-cost carriers, an airline that has faced mounting pressure from surging costs tied to the Iran war.
Apollo, which manages around $1.05 trillion in assets, has previously invested in Sun Country Airlines, Aeromexico and Atlas Air, bringing significant aviation experience to the table.
The deal follows a competitive bidding process in which rival suitor Castlelake withdrew from the race on Thursday without stating a reason, having previously tabled five bids for the airline.
Apollo entered the contest in July, topping Castlelake’s £5.5bn proposal and securing the unanimous backing of easyJet’s board, which was advised throughout by Evercore.
EasyJet founder Stelios Haji-Ioannou confirmed his family’s support for the transaction, saying: “Having carefully reviewed the proposal by Apollo, my family members and I have decided to support the recommended acquisition announced by the easyJet board.”
Non-executive chair Stephen Hester also endorsed the offer, stating: “While we remain confident in the strength of our business and the opportunities ahead, we believe this offer appropriately recognises the quality of the business we have built and delivers immediate, certain and attractive value for shareholders.”
Apollo has said it plans to accelerate easyJet’s commercial ambitions under private ownership, including broadening the airline’s fast-growing holidays business.
The deal makes easyJet the latest in a long line of London-listed companies to be taken private by largely US-based private equity firms, as the FTSE 100 has continued to trade at a discount to its American counterpart.
Regulatory scrutiny remains a significant consideration, with investors and regulators raising questions about how Apollo will comply with European Union rules governing airline ownership and control.
EasyJet’s flying rights within the EU depend on the airline remaining majority-owned and controlled by EU interests, a requirement that has shaped the structure of the proposed deal.
Under the agreed terms, Apollo’s funds will hold up to a maximum of 49.9% of the ordinary capital of the purchasing vehicle, while an EU management trust will hold up to 5%.
The Haji-Ioannou family and other shareholders who remain invested are expected to hold between 45.1% and 49.9% of the ordinary capital following completion.
EasyJet’s main operational base is in Britain, and the Civil Aviation Authority confirmed it has contacted the parties involved in the transaction.
EasyJet shares have rallied more than 65% since initial takeover interest was first disclosed, though they were still trading below Apollo’s offer price at 670p as of 4.08pm on the day of the announcement.