British Airways owner IAG has agreed a deal with Aer Lingus to make a €1.4 billion cash offer for Ireland’s national airline.
It comes after the Irish government agreed to sell its 25 per cent stake in Aer Lingus, after months of discussions.
The deal values the airline at €2.55 a share.
IAG said it “recognises the importance” of the Aer Lingus brand to Ireland so it will ensure the airline will keep its existing slots at Heathrow, maintain the number of flights between Heathrow, Dublin, Cork and Shannon for at least seven years and maintain the carrier’s head office and operations in Dublin.
In a statement, Aer Lingus chairman Colm Barrington said: "This is a compelling transaction for Aer Lingus, its shareholders, its employees, its customers and for Ireland.
"The company will reap the commercial and strategic benefits of being part of the much larger and globally diverse IAG Group."
Despite the Irish government supporting the takeover, the other big shareholder in Aer Lingus, Ryanair, is yet to make a decision.
A spokesperson for Ryanair, which owns a 29.8% stake in Aer Lingus, said on Tuesday: "The board of Ryanair has yet to receive any offer, and will consider any offer on its merits, if and when an offer is made."