EasyJet Shares Tumble on EU Ownership Rule Threat

EasyJet (LON: EZJ) shares plunged as much as 15% on Wednesday, marking the airline’s steepest single-day decline since late 2021, after a Reuters report revealed the European Union is preparing to tighten airline ownership rules in a move that could derail the ongoing bidding war for the carrier.

Shares closed down roughly 11%, falling from Tuesday’s 663.4p close to around 585.2p.

The selloff was triggered by an exclusive report that the European Commission is planning a review, likely in the autumn, to prevent foreign investors from gaining “effective control” of EU-licensed airlines.

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An EU official said the goal is to “protect strategic autonomy,” ensuring regional carriers remain under bloc control.

The news lands squarely in the middle of a bidding war for easyJet between two U.S. private equity firms. Apollo Global Management’s £5.7 billion offer, which easyJet’s board recently backed after topping a rival £5.5 billion bid from Castlelake, has not yet detailed how it would satisfy EU rules requiring majority European ownership and control—a mandatory hurdle since Brexit capped non-EU ownership at 49.5%.

Both bidders have proposed handing 51% of voting rights to EU nationals while reportedly retaining economic control, a structure similar to IAG’s “nationality clause” model. However, the EU review specifically targets whether such arrangements should still be permitted.

Analysts said the drop reflects reassessed deal-completion risk rather than an assumption the takeover is dead. Apollo faces an August 7 deadline to formalize its bid and still hasn’t disclosed its compliance plan.

Neither bidder has discussed structural details with EU regulators, raising doubts about how smoothly the acquisition can proceed. Rivals Wizz Air and Ryanair, which use comparable ownership arrangements, also saw shares dip on the read-through risk.