Key Takeaways:
Apollo Global Management agreed to buy easyJet for £5.70 billion ($7.7 billion), ending a months-long bidding war after rival Castlelake withdrew its pursuit of the European budget carrier.
"We welcome Apollo's commitment to our business and our people, and believe that its experience in the aviation sector makes it a strong partner for easyJet as we accelerate our growth plans and continue to deliver great value and service for our customers," easyJet Chief Executive Officer Kenton Jarvis said.
Apollo's £7.15 per share cash offer represents a 54 percent premium to easyJet's closing price on Feb. 27, the last trading day before the Middle East conflict escalated. Castlelake, the Minneapolis-based aviation investor, had made five proposals including a final £6.90 per share bid valuing the airline at £5.5 billion ($7.41 billion). EasyJet shares rose about 3.1 percent in London afternoon trading Thursday after initially sliding more than 6 percent when Castlelake announced its withdrawal.
The deal, expected to close by the end of the first quarter of 2027, hands Apollo control of a 31-year-old carrier with valuable landing slots at London Gatwick, Paris and Geneva airports. Private equity interest had lifted easyJet shares almost 50 percent by Wednesday's close, and the transaction could spur further consolidation across European aviation as budget carriers face rising fuel and labor costs.
Castlelake, which leases airplanes to about 200 carriers, said it was "very appreciative of the constructive engagement with the easyJet Board and management team" but did not specify why it bowed out. The firm had secured board support for a £6.90 per share bid on July 5, only to be outbid days later when Apollo tabled its higher offer. Castlelake's earlier proposals included a $6.64 billion bid rejected by easyJet in June, followed by an improved $7.3 billion offer that won board backing before Apollo entered the fray.
Apollo's Alex van Hoek, partner and European private equity lead, said easyJet has "a differentiated market position through its compelling customer proposition, expansive network and strong brand." The U.S. alternative asset manager has been expanding its aviation portfolio, and this acquisition marks one of its largest European investments. Apollo's aviation expertise spans aircraft leasing and airline financing, giving it operational familiarity with the sector's capital-intensive economics.
Under UK Takeover Panel rules, Castlelake had until Aug. 3 to decide whether to improve its offer or withdraw. EasyJet's board requested an extension to align timelines for both bidders, but Castlelake ultimately chose to exit the race. The bidding war's resolution in Apollo's favor shows the premium private equity buyers are willing to pay for airport slot portfolios, which are scarce and difficult to replicate at major European hubs.
The transaction requires regulatory approvals from UK and European competition authorities. Apollo's entry into the airline sector follows a wave of private equity interest in European carriers, with easyJet's slot portfolio at constrained airports seen as a key strategic asset. The deal also raises questions about the future of easyJet's holiday division and its fleet expansion plans under private ownership, though Apollo has expressed support for the carrier's growth strategy.
For shareholders, the £7.15 per share cash offer provides a clear exit at a substantial premium to pre-conflict trading levels. For the broader European aviation market, the deal could set a valuation benchmark for other budget carriers, potentially attracting additional private equity interest in airlines with strong route networks and airport access. The transaction also highlights the growing appeal of European aviation assets to U.S. private capital, following similar interest in airport infrastructure and aircraft leasing businesses across the region.
This article is for informational purposes only and does not constitute investment advice.
