BA, Iberia merger deal imminent

By Rhys Jones and Robert Hetz

LONDON/MADRID (Reuters) - A merger between British Airways and Spain's Iberia looked imminent on Thursday as their boards held separate meetings to discuss a deal to create the world's third-largest airline by revenue.

A deal, which seems set to give BA shareholders 55 percent of the new firm, would bring an end to negotiations which stared in July 2008 and aimed to help both airlines cope with the industry's biggest downturn in decades.

"Further to recent market speculation, British Airways confirms that the British Airways and Iberia Boards are holding separate meetings today, 12 November, to consider a potential transaction," BA said in a statement.

"However, no decisions have been taken and, at this time, there can be no guarantee that a transaction will be forthcoming. A further announcement will be made in due course, if appropriate."

Iberia, meanwhile, said its board was discussing a merger that would give the Spanish firm about 45 percent of the new company and BA about 55 percent.

Spanish daily El Pais said on its website that Iberia's board had already approved the deal and that Iberia boss Antonio Vazquez would be chairman of the new company, which would have its headquarters in London.

Analysts were expecting BA's chief executive, Willie Walsh, to be the CEO of the new company with Vazquez as chairman.

Shares in BA were 8.8 percent higher at 217.6 pence by 1509 GMT, while Iberia's shares were up 12.5 percent at 2.23 euros.