Apollo agrees £5.7bn acquisition of easyJet as Castlelake withdraws

London, United Kingdom. Apollo Global has agreed to buy easyJet in a deal valuing the European budget airline at about £5.70 billion ($7.7 billion), the companies said on Thursday, after rival bidder Castlelake withdrew from the takeover process.

The transaction ends months of uncertainty for one of Europe’s largest low-cost airlines as the sector faces higher costs linked to the Iran war.

Board recommendation

easyJet’s board, advised by Evercore, unanimously recommended Apollo’s cash offer, stating that it considered the terms fair and reasonable.

“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,” easyJet Non-Executive Chair Stephen Hester said.

Competing bid withdrawn

Castlelake withdrew from the takeover race earlier on Thursday without providing a reason.

The firm had submitted five offers for easyJet before Apollo entered the process in July. Apollo’s proposal exceeded Castlelake’s £5.5 billion bid and received the support of easyJet’s board.

Ownership structure

Apollo, which manages about $1.05 trillion in assets and has previously invested in Sun Country Airlines, Aeromexico and Atlas Air, said it intended to accelerate easyJet’s commercial plans, including expansion of its holidays business, under private ownership.

Investors and regulators have raised questions about compliance with European Union airline ownership rules, as easyJet’s flying rights within the bloc depend on its EU-based airline being majority owned and controlled by EU interests.

Apollo expects the family of easyJet founder Stelios Haji-Ioannou and other shareholders retaining investments to hold between 45.1% and 49.9% of the ordinary capital in the purchasing vehicle. An EU management trust will hold up to 5%, while Apollo funds will hold the remainder, up to a maximum of 49.9%.