The much talked about merger between the Spanish airline Iberia and British Airways has been given a green signal by the Iberia board. The tax base for the new airline will be in Spain but its main office will be in London.

Antonio Vázquez, who is the current President of the Spanish airline, will be the President of the new airline while Martin Broughton will be the Deputy President. Willie Walsh, the current CEO of British Airways, will be the Chief Executive Officer.

The merger favors Iberia a great deal as its size is almost half in comparison to the British airline. Also, the merger has come at a time when the services of the Spanish airline have been disrupted and more stoppages are on the cards due to strikes.

Both companies will hold their rights to their own non-economic policy and the management of staff during the first five years of the merger.  A holding company named Top Co, comprising of the current shareholders from the two airlines will be formed and 45 shares of the British Airways will be equivalent to 55 Iberia shares.

Iberia shares went up by 12% to 2.2 euro per share after news of approval for the merger came in.