Madrid, Nov 13 (EFE) Spain’s largest airline Iberia and British Airways (BA) have agreed on a merger, the companies said in a joint statement Thursday.
The deal will be completed in late 2010 and make the alliance the world’s third-largest airline group by revenue. The companies signed a MoU (Memorandum of Understanding) in this regard.

The merger will result in the creation of a new holding company called TopCo, which will be registered in Madrid and have its financial and operational headquarters in London.

British Airways will hold 55 percent share of the new company and Iberia 45 percent. Each airline will have seven members on the new company’s board of directors.

The chairman of the new entity will be Antonio Vazquez, Iberia’s current chairman and CEO. His deputy will be current BA chairman Martin Broughton, while the current chief executive officer of British Airways, Willie Walsh, will become TopCo’s CEO.

Iberia and BA transported a combined 62 million passengers in 2008 and took in some 15 billion euros ($22.32 billion) in revenue between them.

The new group will have a fleet of 419 aircraft and fly to 205 destinations.

Iberia has reserved the right to pull out of the deal if the outcome of talks between British Airways and trustees of its deficit-ridden pension fund are not concluded to the Spanish company’s satisfaction.

BA has been pursuing a merger with Iberia since mid-2008 to create an airline to rival Air France-KLM and Lufthansa.