Ryanair has agreed to sell its 29.8% stake in rival Irish airline Aer Lingus to IAG.
The move means IAG can now move ahead with its €1.4bn (£1bn) takeover, for which it needed the approval of the Irish government (see news, May 27) and Ryanair. It now has both.
Last month, the competition watchdog ordered Ryanair to cut its stake in Aer Lingus to 5 per cent (see news, June 11).
Ryanair blasted the final decision by the Competition and Markets Authority (CMA) as "ridiculous" and "manifestly wrong".
But the airline's board has today voted unanimously to accept IAG's offer to buy its shareholding in Aer Lingus. Ryanair will now formally accept the takeover offer on July 16, subject to CMA approval.
Ryanair CEO Michael O'Leary said: "We believe the IAG offer for Aer Lingus is a reasonable one in the current market and we plan to accept it, in the best interests of Ryanair shareholders.
"The price means that Ryanair will make a small profit on its investment in Aer Lingus over the past nine years."
Ryanair has sought to buy Aer Lingus three times since 2006, but O'Leary said his carrier no longer had any need for Aer Lingus.
He said: "This sale of our stake is timely given that our original strategy for Aer Lingus (to use it as a mid-priced brand to offer competition to flag carriers at primary airports) has been overtaken by the successful rollout – since September 2013 – of Ryanair's 'Always Getting Better' strategy, which has seen the Ryanair brand successfully enter many of Europe's primary airports, being rewarded with strong growth in our network, traffic, load factor and profitability, while keeping our fares low and our punctuality high."