EU exec clears Lufthansa to buy Brussels Airlines

BRUSSELS, June 22 (Reuters) - Lufthansa won permission from EU antitrust authorities on Monday to buy Brussels Airlines in a deal worth up to 250 million euros ($347 million) after it agreed to let rivals fly on some of its routes.

'The comprehensive remedies package offered by Lufthansa will facilitate market entry on the affected routes and thereby create alternative choices for passengers,' EU Competition Commissioner Neelie Kroes said in a statement.

To address the European Commission's competition concerns, Lufthansa will allow new entrants to operate flights from Brussels to Frankfurt, Munich, Hamburg and Zurich.

The remedies also include code-share agreements and participation in frequent-flyer programmes.

The acquisition of Brussels Airlines will boost Lufthansa's network.

As part of the deal, Lufthansa will buy a 45 percent stake in Brussels Airlines for 65 million euros, with an option to buy the rest from 2011. The total price would depend on performance-related factors and, initially, on 2010 results.

Airlines around the world are looking to merge with or acquire rivals to boost scale and tap into growth regions following falling demand due to the global economic crisis.

The Commission is now looking into Lufthansa's proposed buy of indebted, loss-making Austrian Airlines, with the deadline for that review set for July 1.

(Reporting by Foo Yun Chee; Editing by Dale Hudson) ($1=.7197 euro) Keywords: LUFTHANSA BRUSSELSAIR/EU ([e-mail]; tel [phone]; Reuters Messaging: [e-mail]) COPYRIGHT Copyright Thomson Reuters 2009. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.