EasyJet has formally agreed to a £5.7bn takeover from US private equity firm Apollo Global Management.

The airline announced it had accepted a firm offer on Thursday after a rival bidder, Castlelake, said it would no longer pursue its attempted acquisition.

The decision means the deal will go through at £7.15 a share, which Apollo tabled last month after the easyJet had initially recommended a sale to Castlelake. The formal agreement came 24 hours before a deadline set for both parties to submit a final offer, but Castlelake declined to enter a bidding war.

Under the agreement, the airline’s founder, Stelios Haji-Ioannou, and his family will retain their shareholding in the new ownership structure. Shareholders have been offered the opportunity to either sell or transfer, up to a maximum of 49.9%.

Stelios Haji-Ioannou, pictured in 2015, and his family will retain their shareholding under the new ownership structure. Photograph: Bloomberg/Getty Images

An “EU Trust” shareholding group will retain up to 5%, a structure that appears designed to comply with the European Union’s foreign ownership rules for airlines, with Apollo limited to 49.9%.

The takeover is expected to complete by the end of March 2027.

Apollo, which has committed to retaining easyJet’s UK and EU head offices, has indicated it would back the airline’s current strategy and support it in generating long-term, sustainable growth.

Alex van Hoek, the US firm’s European private equity lead, said: “EasyJet is a leader in European aviation, having built a differentiated market position through its compelling customer proposition, expansive network and strong brand. Apollo strongly supports easyJet’s commitment to enhancing the connectivity of travellers throughout Europe and the UK and the important role that its employees play in serving customers.”

Stephen Hester, the airline’s chair, said: “The easyJet board has carefully evaluated the proposal from Apollo alongside easyJet’s standalone prospects. 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.”

Kenton Jarvis, easyJet’s chief executive, said: “We welcome Apollo’s commitment to our business and our people, and believe that its experience in the aviation sector makes it a strong partner for easyJet as we accelerate our growth plans and continue to deliver great value and service for our customers.”

EasyJet’s share price, which dropped 10% on news of Castlelake’s exit, rebounded to 3% up from the start of the day.