The European Union is preparing to tighten oversight of airline ownership rules in a move that could complicate takeover attempts by non-European investors, particularly ongoing bids for low-cost carrier easyJet.
An EU official said the planned review is aimed at safeguarding the bloc’s strategic autonomy by ensuring effective control of European airlines remains in the hands of EU investors rather than foreign entities.
The move comes as two US investment firms compete to acquire easyJet, testing regulations that require European airlines to remain at least 51% owned and effectively controlled by EU nationals.
Following Reuters’ report on the proposed review, easyJet shares fell about 8%, reflecting investor concerns over the potential impact of the planned regulatory changes on the takeover process.
Speaking on condition of anonymity due to the sensitivity of the discussions, the EU official said the review is intended to reinforce compliance with existing ownership rules and prevent overseas investors from exercising effective control over European carriers.
Earlier this month, easyJet backed a £5.7 billion ($7.65 billion) takeover offer from Apollo Global Management, surpassing a competing £5.5 billion bid from Castlelake. However, the airline has yet to explain how the proposed deal would satisfy the EU’s majority ownership requirements, a key regulatory hurdle for any non-EU acquisition.
If approved, the transaction could set an important precedent for Europe’s aviation industry by opening the door to more private equity acquisitions in a sector where takeovers have traditionally involved rival airlines, often with government backing.
According to the official, the review, expected to begin in the autumn, will seek to clarify which corporate governance and ownership structures comply with EU rules, with particular emphasis on determining who exercises effective control over an airline.
The official also said Apollo, Castlelake and easyJet have not formally engaged European regulators to discuss the structure of their proposed transactions.
EasyJet and Apollo declined to comment, while Castlelake did not immediately respond to requests for comment.
The official added that regulators are concerned some investors mistakenly believe airline ownership rules are no longer being enforced rigorously, stressing that the review is intended to eliminate any ambiguity and reaffirm the EU’s commitment to strict regulatory compliance.
Goodness Anunobi
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