By Jonathan Davies

Ryanair has agreed to sell its 29.8% stake in Irish airline Aer Lingus to the owner of British Airways.

Aer Lingus and the Irish government have already agreed to sell their stakes as part of the €1.3 billion (£940m) takeover deal.

Ryanair's chief executive said in a statement: "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 9 years."

The deal is now subject to approval from European competition authorities.

IAG plans to build a new transatlantic hub at Dublin airport. The deal will also increase its number of runway slots at Heathrow.