EasyJet has agreed in principle to a takeover offer valued at approximately £5.2 billion from Castlelake, a US-based investment firm, marking a significant development in the European low-cost airline sector. The agreement follows several months of negotiations and multiple bids, with Castlelake increasing its offer to 690 pence per share, which represents about a 45% premium over the airline’s share price prior to the onset of regional conflict and oil price volatility earlier this year.
The deal, recommended by EasyJet’s board chaired by Sir Stephen Hester, comes after the airline initially described Castlelake’s interest as “highly opportunistic” and dismissed previous bids as undervaluing the company. Castlelake had submitted five bids, beginning at 560 pence and rising in increments to its final offer. The board noted the potential for EasyJet to generate close to £1 billion in annual profits, but ultimately agreed that the latest bid presented an attractive value amid a challenging geopolitical and economic environment.
Under the proposed terms, Castlelake would hold a 49% stake in EasyJet, while the remaining 51% would be owned by a consortium including Brookfield Asset Management—another US private equity firm—and European partners, notably Peter Bellew, EasyJet’s former operations chief, and Mark Breen, an Irish airline executive. This ownership structure is designed to comply with strict European Union regulations, which mandate that airlines operating within the EU must be majority owned and controlled by European nationals. Despite Britain’s departure from the EU, EasyJet continues to operate under these European aviation rules due to its extensive operations across the bloc.
The board’s recommendation paves the way for Castlelake to finalize the acquisition by early August, subject to regulatory approvals. Castlelake has committed to a “best endeavours” effort to secure the necessary clearances. The deal is seen as a strategic shift for EasyJet, intending to provide the airline with private capital support for its fleet expansion and sustainability initiatives as it navigates a post-pandemic recovery.
The acquisition follows a turbulent period for EasyJet and the wider airline sector. Since late February, shares in EasyJet declined sharply due to rising oil prices fueled by Iranian regional tensions and threats to shipping routes through the Strait of Hormuz. This volatility contributed to heightened first-half financial losses for EasyJet, which reported a £552 million deficit. However, the recent easing of Middle East tensions and normalization of oil prices have sparked increased travel demand, benefiting the broader market.
EasyJet founder Sir Stelios Haji-Ioannou, a prominent shareholder with an estimated 15% stake valued at around £780 million under the current offer, has yet to comment publicly on the agreement. The completed sale would mark a major transition for EasyJet, potentially reshaping ownership in one of Europe’s leading low-cost airlines and influencing competitive dynamics within the aviation industry.