The European Union is preparing a review of airline ownership rules to prevent foreign investors from gaining effective control of European airlines, according to an EU official.
The possible changes could complicate takeover efforts involving UK-based low-cost carrier EasyJet, where two US investment firms are competing for control.
The review aims to “protect strategic autonomy” and ensure that control of regional airlines remains within the EU, the official said.
EasyJet takeover battle faces uncertainty
The move comes amid a bidding war between two American investment firms seeking control of EasyJet, a deal that could test EU rules requiring airlines to have majority local ownership and control.
EasyJet shares, which had risen sharply in recent months amid growing expectations of a takeover agreement, fell by as much as 15% following a Reuters report on the possible EU rule changes.
The shares were on track for their worst daily performance since late 2021.
“This is to ensure that foreign investors do not have full control,” the EU official told Reuters, speaking anonymously due to the sensitivity of the issue.
“We need to ensure that we have sufficient room for manoeuvre regarding control,” the official added.
Takeover proposals under scrutiny
Earlier this month, EasyJet backed a £5.7 billion ($7.65 billion) offer from Apollo Global Management, which surpassed a previous £5.5 billion bid from Castlelake.
However, the airline has not explained how it plans to meet EU requirements on majority ownership, which remain a key obstacle for any non-EU company seeking to acquire a European airline.
The planned review of airline ownership rules could therefore have wider implications for future foreign investment in the European aviation sector.
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