Sullivan has taken a 50 per cent stake with the rest of the club remaining in the control of the Icelandic bank Straumur something that Fernandes had decided he could not agree to.
Related ArticlesWest Ham takeover contendersWest Ham talks hit impasseFernandes and Sullivan battle for West HamWest Ham saga nears endAston Villa v West Ham United: previewSport on televisionThe two businessmen had been neck-and-neck throughout the day as detailed negotiations continued with CB Holding, the company that owns West Ham. Sullivan, the former co-owner of Birmingham City, eventually came out on top.
Attention will now turn to the future of West Ham manager Gianfranco Zola. Sullivan has already twice sounded out Mark Hughes about succeeding Zola, but the former Manchester City manager is unsure that it is the right move for him until he is given more details over the club's future and the funds that will be made available.
It means that Sullivan may give Zola and assistant Steve Clarke the opportunity to prove themselves until the end of the season, although that will now be discussed. 'No decision has been taken on the manager,' one source said.
However Hughes is also wanted by the Turkish federation as the new coach of their national team and is on a shortlist with Guus Hiddink and Giovanni Trapattoni, the current coach of the Republic of Ireland.
Zola is understood to be deeply concerned about his future and whether or not Sullivan and David Gold - who is also involved in the successful bid and is also likely to join the board along with Karren Brady, who will become a part-time vice-chairman - will back his vision for the club and the coaching of young players.
No details of the financial deal that Sullivan has struck with CB Holding have been revealed. Although he will take a 50 per cent stake, it is thought he will also be given a controlling interest.
Some of the investment will go to the consortium of creditors owed money after the collapse of the business empire of Icelandic tycoon Bjorgolfur Gudmundsson, but a portion of it will also be guaranteed on buying some players and wiping out a part of the £38 million of debt, some of which is also owed to the same banks who are creditors.
Sullivan and Gold sold Birmingham last year for £82 million, having bought it for £1 16 years ago and made no secret of the fact that they wanted to return to football and buy West Ham. They were early frontrunners to take control, although they annoyed CB Holding and West Ham chairman Andrew Bernhardt by painting a picture of a club in meltdown.
At the same time Fernandes, like Sullivan and Gold a lifelong West Ham fan, was putting together his own bid and hoped to secure a complete buy-out of the club. He held talks with Bernhardt before Christmas, and even believed he had shaken hands on a deal.
Fernandes flew into London last week and it looked like he would be able to complete the buy-out. Indeed at one stage on Friday evening he and the negotiators for the banks who had to agree to the sale were just £3 million apart in their valuation of the deal.
A deadline was set by Fernandes of midnight on Saturday for Bernhardt to relent, after the Air Asia chief executive grew frustrated, but he did not.
Fernandes then revived talks on Sunday but, according to sources close to him, the valuation on the club and taking complete control had changed so the two sides were now £10 million apart.
However he persisted with the talks and they continued into yesterday evening with one source claiming it was '50/50' in a race between Fernandes and Sullivan to complete, with the latter eventually winning. According to one source, Sullivan was always regarded as the 'fall-back' option if Fernandes failed.
West Ham supporters will be hugely relieved that the future ownership of the club has been finally decided there were two more expressions of interest, one from the so-called Intermarket Group and another from the Italian industrialist Massimo Cellino but they may be concerned that the Icelandic involvement and that of the finance house, Straumur, the main shareholder in CB Holding, does not appear to have ended.
Brady, the former Birmingham managing director, is expected to work two days a week at West Ham she has indicated she does not want a full-time job - alongside the current chief executive, Scott Duxbury, and finance director Nick Igoe.
Sullivan will now have less than two weeks to decide whether or not to buy in the January transfer market and to look to strengthen the squad with the team hovering just above the relegation places.