EU Tightens Grip on Airline Ownership Amid EasyJet Takeover Talks

The European Union plans to review airline ownership rules to limit foreign control, affecting bids from U.S. firms for EasyJet. The review aims to keep strategic control within the EU and could set precedents for private equity buyouts in the aviation sector.

The European Union is poised to reevaluate its airline ownership regulations to guard against foreign investors gaining effective control over its carriers. This move, revealed by an EU official on condition of anonymity, is expected to pose challenges to U.S. investment bids for the low-cost airline, EasyJet.

As U.S. investment firms Apollo Global Management and Castlelake vie for control of EasyJet, the review aims to protect EU control over regional airlines amid a competitive acquisition landscape. EasyJet's shares fell sharply by nearly 12% following the news, sparking investor unease over potential delays or obstacles to the takeover.

Ahead of the formal deal-making, the EU will clarify permissible corporate ownership structures this autumn. Both Apollo and Castlelake have yet to address the regulatory hurdles posed by the EU’s majority local ownership requirement, a pivotal factor in the pending bid outcomes.