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Lufthansa reportedly close to selling BMI to IAG

Lufthansa is reportedly finalising the sale of British Midland International (BMI) to British Airways parent International Airlines Group (IAG).

Quoting unnamed sources close to the negotiations, a number of media reported today that the German carrier has finally decided to sell its UK subsidiary to the Anglo-Spanish airline consortium.

Lufthansa had negotiated with a number of bidders over the past weeks, including Virgin Atlantic Airways.

A potential deal with IAG could be announced as early as tomorrow when the group presents its financial results for the first nine months of 2011.

With the acquisition, IAG would command 60-70% of the slots at London Heathrow. With around 8.5% of slots, BMI is the second largest slot holder at the hub after BA.

Given that Heathrow's capacity has been virtually exhausted, Virgin said it is "very concerned about the competition ramifications of an IAG purchase of BMI".

Lufthansa and BA declined to comment on the status of their negotiations.

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