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Derby-based airline BMI has been bought by International Airlines Group (IAG), it was revealed this morning. The deal, thought to be worth £300m, was met with disapproval from rival bidder Virgin, which expressed concern over IAG's "domination" of the airline industry.

IAG said it had reached and undisclosed agreement with BMI's parent company Deutsche Lufthansa AG (Lufthansa) to purchase the airline.

BMI, which flies from East Midlands airport, has been the subject of takeover talk for several months.

This morning, IAG said it had reached "an agreement in principle" for the sale of the airline from its current parent.

IAG said this morning: "The sale and closing of the deal remain subject to conditions including a binding purchase agreement, further due diligence and regulatory clearances.

"It is envisaged that the purchase agreement will be signed in the coming weeks and the aim is for the transaction to be completed in the first quarter of 2012."

Although no figures have been released, reports suggest the airline's pricetag stood at about £300m.

As the takeover was announced, rival airline Virgin said this morning that it was "very concerned" over British Airways' "dominant" hold over the airline industry.

Sir Richard Branson's company revealed that it had also made a bid for BMI.

Virgin said: "British Airways' hold over Heathrow is already too dominant and we are very concerned - as the competition authorities should also be - that BA's purchase of BMI would be disastrous for consumer choice and competition."

Last week, BMI announced plans to sell off its Aberdeen-based subsidiary BMI Regional. The company said it was in "advanced discussions" to dispose of the arm to a UK-based investor group "previously associated with the regional business".

BMI said the sale would be in the form of shares of BMI Regional, all assets used in the BMI Regional business including the aircraft fleet, the existing regional route network and the continued employment of the existing staff.

Wolfgang Prock-Schauer, chief executive of BMI, said: "The intended sale of BMI Regional is part of the strategic review of BMI. It is our goal to find sustainable solutions for all parts of the BMI business and we as well as the shareholder continue to assess options.

"We are pleased by this development that BMI Regional will be an independent airline with management dedicated to developing the regional business. Employment prospects will be enhanced through a planned growth strategy."

The bidder has not yet been disclosed.