EasyJet agrees to 5.2 billion takeover by US investment firm Castlelake
EasyJet, Britain’s largest low-cost airline, has agreed in principle to a £5.2 billion (€6.1 billion) takeover by the US investment firm Castlelake, marking the end of a months-long battle between the two sides. The agreement, announced on Sunday evening, follows five previous offers that EasyJet had rejected, including a £6.50-per-share bid just 10 days earlier. Castlelake’s final proposal of £6.90 per share—valuing the airline at 73% above its closing price on 29 May—has now been deemed acceptable by EasyJet’s board, which will recommend the deal to shareholders .
The proposed transaction would take EasyJet private, removing it from the FTSE 250 index. Castlelake, a Minneapolis-based private equity firm managing $38 billion in assets, specialises in asset-based lending and aircraft leasing, a sector where EasyJet’s fleet of over 350 Airbus A320s could prove strategically valuable. Analysts have speculated that Castlelake may explore spinning off EasyJet’s holiday arm or leveraging its leasing business to optimise the airline’s operations .
However, Castlelake’s US ownership presents a regulatory hurdle. Under EU rules, airlines operating within the bloc must be majority-owned and controlled by EU citizens. To comply, Castlelake plans to retain only 49% of EasyJet, with the remaining shares held by EU-based managers Peter Bellew and Mark Breen. Bellew, a former EasyJet executive who left abruptly in 2022, and Breen, a aviation industry veteran, would together ensure EU compliance while allowing Castlelake to proceed with the acquisition .
The deal comes at a challenging time for EasyJet, which has faced two profit warnings this spring amid soaring fuel costs triggered by the US-Israeli conflict with Iran. Kenton Jarvis, the airline’s chief executive, reported declining bookings in March due to the geopolitical instability. Competition from rivals like Ryanair, Wizz Air, and Jet2 has further pressured margins in Europe’s low-cost sector .
For Stelios Haji-Ioannou, the airline’s founder and largest individual shareholder with a 15.3% stake, the deal could net nearly £800 million if completed. His family’s holding has been a key factor in the negotiations, with shareholders previously urging the board to secure a price above £7 per share .
Castlelake now has until 3 August to submit a formal, binding offer. The airline’s board has requested an extension to finalise the deal, reflecting the complexity of structuring the transaction while meeting EU ownership requirements. EasyJet operates from 164 airports across 38 countries, employing 19,000 people, though no details have been disclosed regarding Castlelake’s plans for the workforce .
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