US private equity firm Apollo will take over EasyJet as part of a multi-billion pound deal
One of the UK's most popular discount airlines has been sold off to a US private equity firm in a multi-billion pound deal.
EasyJet has confirmed it has agreed to be acquired in a £5.7billion deal by US firm Apollo.
The deal's announcement came after rival bidder Castlelake revealed it was dropping out of the bidding war for the budget airline.
As one of Europe's largest airlines, EasyJet flies to around 1,2000 routes across dozens of European countries and employs over 19,000 people.
As part of the acquisition, the US company , which also owns Wagamama-owner The Restaurant Group, pays shareholders 715p per share for the business.
On the deal, EasyJet chief executive Kenton Jarvis said: "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."
Alex van Hoek, partner and European private equity lead at Apollo, added: "EasyJet is a leader in European aviation, having built a differentiated market position through its compelling customer proposition, expansive network and strong brand."
Furthermore, Apollo reiterated that it was "highly supportive" of EasyJet's existing strategy, citing that there was "a significant opportunity to accelerate the operational and commercial ambitions" for the group.
Today's EasyJet announcement comes after fellow discount airline Wizz Air shared its financial results, with the company posting a "wider than expected loss" in the first months of the year.
Airlines have struggled to navigate the aftermath of the US-Iran tensions, which has resulted in a fuel price spike with oil becoming more expensive.
Russ Mould, AJ Bell's investment director, shared: "The company’s inability to point to a clear path through the current issues clouding the outlook for the airline sector also didn’t help.
"Budget airlines are more exposed to the increase in fuel costs given the need to keep a lid on fares to sustain their value credentials.
"Plus, their cohort of customers’ ability and willingness to spend is disproportionately affected by renewed inflationary pressures.
"Wizz Air’s big expansion in recent years plus its decision to redirect planes on routes affected by the Middle East conflict to European destinations has resulted in overcapacity and means that despite flying more passengers it is doing so much less profitably.
"The decision to continue expanding its fleet is a bold call, pursued in the hope that it can take market share if less robust rivals exit the market. For now, investors look to be unconvinced by this strategy."
