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The price fell steadily from a starting mark of 225.00 throughout the day's stock market trading after it was revealed the organisations had agreed a memorandum of understanding, which sets the basis for them to join together next year.
Each brand will continue to exist but will be owned by a new holding company, TopCo, in which BA and Iberia will hold 55 per cent and 45 per cent stakes respectively.
Willie Walsh, chief executive of BA, said that the merged group will be "well able to compete in the 21st century", with each part benefiting from the "significant synergies" of working together.
Between them, BA and Iberia transported 62 million passengers in 2008, while they also generated €15 billion (£13.39 billion) in revenue during the latest financial year.
Posted by Greg Secker
