Vienna - Austrian Airlines AG's takeover by Deutsche Lufthansa AG should be concluded over the next two months, the Austrian state holding OeIAG announced today.

Since Air France-KLM and Russian carrier S7 did not submits offers conforming to the specifications of the bidding process, OeIAG said, it would now enter into exclusive "closing talks" with Lufthansa about selling its 42.75-per-cent stake.

"I expect the signing of contracts within a month, so that the necessary decisions can be taken at the next OeIAG governing board meeting on December 5," OeIAG Chief Executive Peter Michaelis said.

The ailing Austrian carrier has come under pressure from slowing demand and rising fuel prices this year.