The Mexican government will sell its majority stake in airline company Consorcio Aeromexico to a group of investors that includes Citigroup's Mexican unit Banamex.

The group's offer of MXN2.7159 a share, or US$249 million, for the carrier was the highest when the offer expired.

The Banamex group reiterated its plan to inject $240 million into the airline within 90 days, and said Jose Luis Barraza will be the new chairman of the company.

A MXN2.72 a share counter-offer from businessmen Alberto Saba Raffoul and Moises Saba Masri arrived two minutes after the offer expired.

Gerardo Rodriguez, public credit director in Mexico's finance ministry, said the government is pleased with the price it received for its 62 percent stake in the carrier.

The approach of the expiry time for the Banamex group's offer saw a flurry of bids. First, the Sabas raised their bid to MXN2.50 a share from MXN2.33. A minute before the deadline, the other group presented its MXN2.7159 a share offer, up from MXN2.2508 a share, and that was followed by the higher Sabas bid.

The investor group's winning bid was nearly two-and-a-half times higher than the Sabas' original offer of 101 million, or MXN1.10 a share, made in late August.

Moises Saba conceded defeat, saying the final bid arrived too late, while criticizing the way the government went about making its decision.

Saba, who earlier had described the impending finale of the bidding war as Russian roulette, said he doesn't plan to appeal because they do not want to obstruct the process any longer.

Considerations in accepting the Banamex group's offer were the urgent need for shareholder investment in the airline, and the opportunity cost of allowing the Banamex group's bid to expire.

Aeromexico reported an operating loss of $108 million in the first half of 2007, which it attributed largely to increased competition from low-cost carriers pushing down prices, and higher fuel costs.

A third group that entered the bidding for Aeromexico was rival airline concern Grupo Mexicana, but its offer was blocked by the country's antitrust commission, which argued that it would threaten competition in the industry. Mexicana raised its MXN2.19 a share bid to MXN2.45 yesterday, and said it was appealing the antitrust decision.