EasyJet has officially finalised a £5.7 billion acquisition deal with the American private equity firm Apollo Global Management. This announcement follows the withdrawal of rival bidder Castlelake, which had previously expressed interest in acquiring the airline. The agreement is set to take place at a share price of £7.15, marking a significant milestone for EasyJet and its stakeholders.
Details of the Acquisition
The airline’s acceptance of Apollo’s offer comes just ahead of a deadline for final bids, as Castlelake chose not to engage in a competitive bidding process. The arrangement allows EasyJet’s founder, Stelios Haji-Ioannou, along with his family, to maintain their shareholding in the newly formed ownership structure. Shareholders are given the option to either sell or transfer their shares, limited to a maximum of 49.9%.
To adhere to the European Union’s regulations concerning foreign ownership of airlines, a newly created “EU Trust” will manage up to 5% of shares, ensuring compliance while allowing Apollo to hold a controlling interest of 49.9%.
Future Prospects Under New Ownership
The acquisition is anticipated to be completed by the end of March 2027. Apollo has pledged to retain EasyJet’s operational headquarters in the UK and the EU while supporting the airline’s existing strategic initiatives. This commitment aims to foster long-term, sustainable growth in a competitive aviation market.
Alex van Hoek, who leads Apollo’s European private equity division, highlighted EasyJet’s strong position in the European aviation industry, citing its unique market proposition, extensive network, and reputable brand. He expressed confidence in EasyJet’s future, emphasising the firm’s dedication to enhancing travel connectivity across Europe and the UK, alongside the vital role of its employees.
Board Perspectives
Stephen Hester, chair of EasyJet, remarked on the board’s thorough assessment of Apollo’s proposal against the airline’s independent prospects. He acknowledged that while the airline remains optimistic about its standalone capabilities, the offer from Apollo accurately reflects the quality of the business and provides immediate, tangible value for shareholders.
Kenton Jarvis, EasyJet’s chief executive, welcomed Apollo’s commitment and expertise in the aviation sector. He stated that this partnership will enable EasyJet to accelerate its growth ambitions while continuing to deliver exceptional service and value to its customers. Following the news of Castlelake’s exit, EasyJet’s share price initially fell by 10% but later rebounded to show a 3% increase from the start of the trading day.
Why it Matters
This acquisition marks a pivotal moment for EasyJet, as it transitions into a new phase under Apollo’s stewardship. The deal not only promises enhanced operational support and strategic alignment but also reinforces investor confidence in the airline’s future. With a strong emphasis on maintaining its identity and operational roots, EasyJet is poised to navigate the evolving landscape of the aviation industry while continuing to prioritise customer service and connectivity across Europe.