Easyjet Shares Plunge on EU Probe Fears Over Airline Ownership Rules
Shares in Easyjet fell over 14% on Wednesday following reports that the European Union is preparing a review of airline ownership rules, potentially complicating the budget carrier's planned takeover by US investment firm Apollo. Easyjet had indicated it would likely accept an all-cash offer from Apollo, outbidding another US firm, Castlelake. However, an unnamed EU official told Reuters the review aims to prevent foreign investors from gaining effective control of European airlines, which must be majority-owned by European nationals under current regulations. The review was not prompted by Apollo's bid but is part of a broader assessment of airline services. Neither Apollo, Castlelake, nor Easyjet have discussed their proposed deals with EU regulators. The market reaction reflects nervousness over private equity's ability to meet European Commission demands, with few precedents for healthy airline takeovers.
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