British budget carrier agrees to a $6.7 billion private equity buyout

Budget carrier EasyJet has reached an agreement in principle to be acquired by U.S. private equity firm Castlelake in a deal that values the UK airline at £5 billion, approximately $6.7 billion.

The announcement came on Sunday, after the airline’s board of directors had previously rejected four bids from the investment firm. Following the breakthrough, EasyJet shares jumped nearly 10% on the London Stock Exchange on Monday.

The airline’s board stated it is “minded to recommend” the buyout offer of £6.90 per share to its shareholders. Under regulatory guidelines, Castlelake must submit a formal takeover bid by Aug. 3 or withdraw its offer.

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For EasyJet, the deal marks a significant moment in its history. Founded in 1995 by entrepreneur Stelios Haji-Ioannou, the carrier grew rapidly by offering low-cost, no-frills flights across Europe. Operating out of its main UK hub at London Gatwick Airport, the airline built its business on making regional European travel highly accessible to the public.

However, the carrier has recently faced severe financial pressures because the soaring jet fuel costs stemming from the Iran war have cut heavily into corporate profits, creating a challenging environment for the independent airline.

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Minneapolis-based Castlelake brings massive aviation resources to the agreement. The firm manages about $37 billion in assets and already leases a fleet of 375 planes to hundreds of global airlines.

In a statement, EasyJet noted that the private equity firm has expressed respect for the airline’s workforce and intends to support its future growth and transformation into a more resilient European carrier. Castlelake has also signaled its full backing for EasyJet’s fleet modernization program, identifying the initiative as central to the airline’s long-term efficiency, sustainability, and competitiveness.