Apollo's Takeover of easyJet

This month, easyJet agreed a £5.7 billion takeover by US private equity firm Apollo, which would take the airline private after more than 25 years on the London Stock Exchange. The deal followed a bidding contest with another US firm, Castlelake, and has raised questions over how an American buyer can own a European airline.

Castlelake's interest became public at the end of May. After rejecting four earlier bids, the easyJet board said in July it was minded to recommend Castlelake's offer of £6.90 per share. Days later Apollo offered £7.15 per share in cash, an 81% premium to the share price before the offer period began, and the board switched its support. Castlelake, which had made five proposals, withdrew on 6 August and Apollo announced its firm offer under Rule 2.7 of the Takeover Code the same day. The deal came as the airline industry struggled with higher fuel costs following the conflict in the Middle East, with easyJet reporting a pre-tax loss of £552 million for the first half of 2026.

The most notable feature of the deal is its ownership structure. Under Regulation (EC) No 1008/2008, airlines flying within the EU must be majority owned and effectively controlled by EU interests, and easyJet's EU flying rights depend on its Austrian subsidiary, easyJet Europe, meeting that test. Apollo's funds will therefore hold no more than 49.9% of the acquisition vehicle. Founder Sir Stelios Haji-Ioannou and his family, who hold about 15% of easyJet, have agreed to roll their shares into the vehicle rather than take cash, and together with other remaining shareholders will hold between 45.1% and 49.9%. An EU management trust will hold up to 5%. Other shareholders can also choose unlisted shares instead of cash, subject to a three-year lock-up.

The structure is designed to keep voting control with EU interests while giving Apollo significant economic value. However, the EU is reviewing how its ownership and control rules apply to structures of this kind, and the UK Civil Aviation Authority has confirmed it is in discussions with the parties. The deal will be carried out through a scheme of arrangement and is expected to complete by the end of March 2027.

Regulation shaped the entire structure of this deal. It gives other private equity buyers a model for investing in heavily regulated industries without taking formal control.