Shareholders in British Airways have voted to approve a proposed merger with Spanish flag-carrier Iberia.

The deal – initially agreed in November 2009 – will see the two carriers merge to form a new company entitled International Airlines Group (IAG).

Pictured: International Airlines Group will become the second largest carrier in Europe

The move will create Europe’s second-largest carrier – behind Air France-KLM - with a market value of around £4.5bn.

A reciprocal meeting of Iberia’s shareholders in Madrid is expected to confirm the deal later on Monday.

The BA and Iberia brands will continue to operate as normal, but BA shares will no longer be listed on the London stock exchange.

Future Plans

BA chief executive, Willie Walsh, who will become IAG chief when the merger completes, has recently outlined further expansion plans for the new organisation.

Walsh identified a number of carriers he believes are suitable merger partners for IAG, while American Airlines has already entered into a strategic alliance.

IAG also outlined its proposed board earlier this year.