Tuesday, November 9, 1999 Published at 08:55 GMT
Business: The Company File
Lufthansa buys stake in British Midland
British Midland's Heathrow slots are highly sought-after
German airline Lufthansa has confirmed that it has bought a 20% stake in British Midland.
Lufthansa reached agreement over the weekend with Scandinavian carrier SAS, which held 40% of the UK airline.
The deal will allow British Midland to join the Star Alliance of airlines, led by Lufthansa.
This will give the alliance access to the hugely lucrative take-off and landing slots at London's Heathrow airport held by British Midland.
The company's 200 Heathrow slots have been seen as one of the its most important assets by a number of possible buyers who have been running the rule over the airline in recent weeks.
KLM, Air France and Virgin are all believed to have made approaches.
Lufthansa paid £91.4m for its stake in British Midland, the UK's second-largest airline.
The UK airline confirmed last month that it was in exclusive talks with Lufthansa.
A tie-up between the two companies has been condemned by British Airways as "anti-competitive".
BA said last month that if Lufthansa bought a stake in British Midland and acquired its Heathrow slots it would "decimate" competition on London-Frankfurt and London-Scandinavia routes."
BA said it was concerned that its attempted tie-up with American Airlines was blocked by competition authorities while the British Midland deal was apparently being "nodded through".
It said it would lodge a protest with the European Commission if the Lufthansa/British Midland deal went through.
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