US investment firm Apollo Global Management has reached an agreement to acquire easyJet, bringing an end to a months-long battle for control of one of Europe’s largest low-cost airlines and surpassing the competing offer submitted by Castlelake.

The transaction values easyJet at approximately £5.7 billion, or $7.7 billion, with Apollo offering shareholders 715 pence per share. Castlelake, which had valued the airline at £5.5 billion, withdrew from the process on Thursday without disclosing the reasons for its decision, Reuters reported.

EasyJet’s board unanimously backed Apollo’s offer, concluding that the proposed terms were fair and reasonable and provided shareholders with immediate and certain value. The offer also received the support of easyJet founder Stelios Haji-Ioannou and members of his family.

“Having carefully reviewed Apollo’s proposal, my family members and I have decided to support the recommended acquisition announced by the easyJet board,” Haji-Ioannou said in a separate statement.

EasyJet Non-Executive Chair Stephen Hester said the board remained confident in the airline’s business and future growth opportunities, but believed the offer appropriately reflected the value created by the company.

“While we remain confident in the strength of our business and the opportunities ahead, we believe this offer appropriately recognises the quality of the business we have built and delivers immediate, certain and attractive value for shareholders,” Hester said.

Apollo entered the takeover race in July, after Castlelake had already submitted five proposals. EasyJet’s board had initially indicated its support for Castlelake’s offer of 690 pence per share, but later withdrew that recommendation after Apollo submitted a higher bid.

The agreed price represents a premium of approximately 81% to easyJet’s closing share price of 394 pence on May 28, the final trading day before Castlelake’s interest became public. EasyJet shares have since risen by more than 65%, although they still closed at 670 pence on Thursday, below Apollo’s offer price.

The gap between the market price and the agreed offer suggests that investors continue to see a degree of execution risk. The main challenge concerns European rules requiring airlines to remain majority-owned and effectively controlled by EU interests in order to retain traffic rights within the European Union.

Under the proposed ownership structure, the Haji-Ioannou family and other existing shareholders who choose to retain their investment are expected to hold between 45.1% and 49.9% of the ordinary share capital of the acquiring vehicle. A management trust controlled by EU interests would hold up to 5%, while Apollo-managed funds would own the remainder, capped at 49.9%.

At the same time, the European Union is reviewing the application of airline ownership and control rules, which could make it more difficult to use structures in which investors from third countries exercise economic influence while a majority of voting rights is formally held by European partners or trusts.

The UK Civil Aviation Authority confirmed that it had been engaging with the parties involved in the transaction. Although easyJet’s main base is in the United Kingdom, the airline operates bases and affiliated carriers across the European Union, making the preservation of its European traffic rights one of the key conditions of the takeover.

Apollo manages approximately $1.05 trillion in assets and has previously invested in the aviation sector through Sun Country Airlines, Aeromexico and Atlas Air. Following the acquisition, it plans to accelerate easyJet’s commercial ambitions, including the further expansion of its fast-growing easyJet holidays business.

A move into private ownership would also reduce easyJet’s exposure to the pressures of quarterly earnings reporting and short-term capital market expectations. Analysts believe such a structure could make it easier for the airline to manage rising fuel costs, finance aircraft acquisitions and secure more favourable leasing arrangements.

EasyJet is therefore set to become the latest in a series of major London-listed companies acquired by US investment funds and other foreign investors in recent years. The agreement also brings to an end months of uncertainty, during which easyJet moved from rejecting Castlelake’s initial approaches to accepting Apollo’s higher offer and preparing for an expected delisting.