The boards of directors of Kingfisher Airlines Ltd and Deccan Aviation Ltd have finally agreed to merge Kingfisher with Deccan Aviation.

Kingfisher Airlines, an unlisted company, is a wholly-owned subsidiary of UB Breweries Holding, the UB group’s investments holding company.

The airline business of the Kingfisher Airlines will be demerged into Deccan Aviation and the combined airline company will be renamed as Kingfisher Airlines.

After the merger, the UB group and its founder Vijay Mallya will together own about 69% of Deccan Aviation Ltd. The demerger will be effective from April 1 this year, subject to statutory approvals.

Further the board decided to sale the charter business of the company to an entity to be jointly owned by Captain Gopinath and the UB Group.

The merger creates one of the biggest airlines in the country with a market share close to one-third. The merger of Kingfisher with Deccan Aviation will allow Kingfisher to fly overseas from May when Deccan completes five years of its existence.

The board of directors also decided to allot shareholders of Kingfisher Airlines three shares in Deccan Aviation for every seven shares held in Kingfisher.