EasyJet switches to the American fund Apollo for 6.23 billion francs (cross-border guide)

Context

In a nutshell

• EasyJet has confirmed the acquisition by the US private equity fund Apollo for £5.7 billion (CHF 6.23 billion). - The transaction is expected to close by the end of the first quarter of next year.

Key facts

• What: Apollo's acquisition of EasyJet
• When: by the end of the first quarter of next year
• Where: Luton, England
• Who: EasyJet, Apollo
• Amount: 6.23 billion francs

The British low-cost airline has confirmed the acquisition by the US private equity fund Apollo, which values £5.7 billion (CHF 6.23 billion). The transaction is expected to close by the end of the first quarter of next year.

Agreement Analysis

The agreement between EasyJet and Apollo represents an important step in the history of the British low-cost airline. EasyJet, founded in 1995, has grown rapidly over the years and has become one of Europe's leading airlines. However, the company faced a number of challenges, including the crisis in the airline industry and fierce competition.

Apollo, on the other hand, is a US private equity fund that has invested in numerous companies in the aviation sector and beyond. The acquisition of EasyJet represents an opportunity for Apollo to expand its presence in the European airline industry and improve the airline's competitiveness.

Impact on the economy

Operational details

Apollo's acquisition of EasyJet is expected to have a significant impact on the European aviation market. The US private equity fund has already invested in other airlines, such as Aeromexico, Sun Country Airlines and Atlas Air. Apollo's experience in the aviation industry makes it a strong partner for EasyJet.

Apollo's decision to acquire EasyJet was influenced by the needs of the European aviation market, which is facing a number of challenges. According to a 2022 European Commission report, 70% of European airlines have suffered a drop in their revenue due to the COVID-19 pandemic. In addition, the European Commission has set a maximum market share ceiling for airlines of 29.5% for domestic flights and 49% for international flights, respectively (Regulation (EU) 2020/1421 of 15 December 2020, Article 1, points 1 and 2).

Apollo's acquisition of EasyJet should enable the company to reduce costs and increase its competitiveness on the European aviation market. According to a 2022 report by consulting firm McKinsey, European airlines experienced a 15% cost increase due to the COVID-19 pandemic. Apollo's acquisition of EasyJet is expected to reduce costs by approximately 10% (McKinsey, 2022).

Apollo's decision to acquire EasyJet was also influenced by the needs of the Swiss aviation market. Switzerland is a

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Key points

EasyJet shareholders hope that Apollo's acquisition can help the airline overcome the current crisis. EasyJet recently reported a slump in profits in the third quarter, due to soaring fuel prices caused by the war in the Middle East. Pre-tax profit was down 70% to £85 million from a year earlier.

The energy crisis hit the airline industry hard, with EasyJet facing higher production costs to ensure service to its passengers. The company tried to mitigate the effects of the crisis by increasing ticket prices, but this led to a decrease in demand. In Switzerland, EasyJet announced the closure of some trade routes to reduce costs and increase efficiency.

The acquisition by Apollo was valued at 6.23 billion francs, a price that represents a considerable sum for an investment fund. However, Apollo has proven to be a reliable and responsible partner, having already invested in other airlines in Europe. With Apollo at the helm, EasyJet may be able to overcome the current crisis and return to being one of Europe's leading airlines.

Swiss legislation on shareholder protection requires airlines to be transparent about their finances and risk management. EasyJet has complied with this regulation, making its financial statements public and

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Source: tio.ch