British Airways has confirmed Thursday that its proposed merger with Spanish carrier Iberia will go ahead after concluding a £4.2 billion (US$7 billion) deal. The merger – 18 months in the making – creates the world’s third largest airline group and will see BA take control of 55 per cent of the combined group, rising to 56 per cent when cross shareholdings held by the two companies are cancelled next year. Willie Walsh, BA’s chief executive will become the head of the new BA-Iberia, while Iberia’s chief executive and chairman, Antonio Vazquez is set to be appointed chairman. The deal is expected to be signed in late 2010. The two airlines will be operated separately under a new holding company, presently known as TopCo, which will be a Spanish incorporated entity registered in Madrid and will be tax resident in Spain. The operating and financial group will be based in London with the company’s shares trading on the London Stock Exchange.