The Irish government has agreed to sell its 25% stake in Aer Lingus causing shares in the Irish airline to rise. This follows two unsuccessful attempts at takeover last year.

The government will sell its stake to International Airlines Group (IAG), the owner of British Airways. The government’s acquiescence comes after IAG’s pledges to preserve jobs within the Republic, however, the government, a coalition, still needs to formally vote for the deal.

Another major shareholder, Ryanair, which owns 29.9%, is yet to agree to the bid. The budget airline itself has attempted to takeover Aer Lingus on three separate occasions. Aer Lingus’ share value has significantly dropped in recent years.

Willie Walsh, the chief executive of IAG, says, "We're hopeful that Ryanair will see this as an attractive offer for their stake in Aer Lingus and we will wait to see what Ryanair and the Ryanair board says in response to this."

Under the deal, Aer Lingus would continue to operate under the Aer Lingus brand. Willie Walsh, CEO of Aer Lingus, says, "Aer Lingus would maintain control of its brand and operation while gaining strength as part of a profitable and sustainable airline group in an industry that's consolidating. Ireland's vital air links to Europe and North America would be enhanced, creating new jobs, with cast-iron guarantees on ownership of Aer Lingus' Heathrow slots."

Ryanair has 28 days to respond to the IAG offer. Walsh has said that it will not increase the offer price.