BRITISH AIRWAYS & IBERIA PLAN TO MERGE

British Airways and Spanish airline Iberia have reached a preliminary agreement for a merger expected to be completed in late 2010. The merger, which is expected to get regulatory backing, would create the world's third biggest airline. Under its terms, Iberia would take a 45% stake and BA, which last week reported a six-month pre-tax loss of £292m, a 55% stake in the new company. Iberia says it can pull out if BA fails to resolve its pension deficit problem.