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EasyJet Avoids Takeover Attempt by Wizz Air  

In what would have been a major consolidation in Europe’s low-cost carrier space, EasyJet has denied a takeover offer by Hungarian airline Wizz Air. However, the British carrier is leaving the door open to a possible merger with another company in the future.

British low-cost carrier EasyJet will not end up under new ownership yet, after a takeover attempt was denied by the company’s board. Financial Times reports the British carrier rejected an offer by Hungary’s Wizz Air.

EasyJet Plans Fundraising Round, But Could Merge With Another Airline in the Future

According to insiders familiar with the deal, the unsolicited offer from Wizz Air consisted of a “low premium and highly conditional” transaction in shares. The value of the share exchange was not disclosed.

Instead of accepting the offer from Wizz Air, the company will seek to raise roughly $1.66 billion from shareholders, diluting founder Sir Stelios Haji-Ioannou of his 25 percent holding of the company. While the proposed influx of money will help the carrier weather the current economic conditions, others inside the company believe that merging with another airline is an inevitable consequence of the COVID-19 pandemic.

The downturn caused by the spread of the novel Coronavirus created the first losses in the 25-year history of EasyJet. The airline dropped around $2.77 billion due to the pandemic and is only planning to fly 75 percent of their full schedule until 2022.

Based in Budapest, Wizz Air currently serves over 140 destinations throughout Europe, the Middle East and Africa. With subsidiaries based in Dubai and the United Kingdom, the merger would have allowed the airline to expand their footprint across Western Europe. The Hungarian airline did not comment on the proposed merger.

Avoiding Merger Latest Twist in EasyJet’s Runway to Recovery

The move by EasyJet to avoid acquisition is their latest move to stay afloat. In April 2020, the airline sold some of their airframes to leasing companies to bring in cash, followed by laying off 4,500 employees in June 2020 to cut costs further.