UPDATE 3-Lufthansa's M&A deals draw "sell" call

* EU exec approves Lufthansa's purchase of Brussels Airlines

* Lufthansa says strikes deal to buy Bishop's BMI stake

* Moody's downgrades outlook on Lufthansa to 'negative'

* Analysts sceptical on recovery

* Shares down 2.7 percent, blue-chip market off 3 percent

(Adds Moody's downgrade, analyst comments)

By Foo Yun Chee and Maria Sheahan

BRUSSELS/FRANKFURT, June 22 (Reuters) - Progress by Deutsche Lufthansa (LHAG.DE) towards sealing acquisitions drew scepticism on Monday about whether consolidation will help the company boost its earnings amid a weak economic environment.

The airline obtained permission from EU antitrust authorities 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 German flag carrier also struck a deal with Sir Michael Bishop to acquire his stake of 50 percent plus one share in BMI, boosting its stake in the carrier to 80 percent. As part of the deal, Bishop will receive 223 million pounds ($367.4 million).

"The BMI stake increase is a disaster from our point of view because BMI is without any added value for Lufthansa and the total consideration is higher than expected by us," said DZ Bank analyst Robert Czerwensky.

He said a break-up of the company was the only option for unloading the loss-making British carrier. Lufthansa will publish further details of plans for BMI on June 25, he said.

Lufthansa said earlier this year it was considering various options for BMI, which controls 11 percent of lucrative take-off and landing slots at Britain's Heathrow airport. Options ranged from continuing the carrier's operations to selling the company.

At the same time, Lufthansa is still in talks to buy the remaining 20 percent of BMI from Scandinavian airline SAS (SAS.ST), according to a spokesman for SAS.

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