Etihad Airways is expected to raise its stake in Air Berlin from 30% to 49.9%, prompting a de-listing of the German carrier.
A group of German shareholders, among them former and current company executives, would raise their stakes to hold more than 50% between them, preserving the carrier’s German status.
Citing company sources, German magazine WirtschaftsWoche said Air Berlin, Germany’s second-largest airline after Lufthansa, needs to remain German so as not to lose its traffic rights outside the European Union.
Smaller investors, who now hold 38.5% of the group’s shares, would be bought out.
The magazine said that Etihad chief executive James Hogan would seek the German government’s backing for the Air Berlin deal, which would be worth more than €100 million.
Etihad has been building a network of airlines by buying up minority stakes as it seeks to channel more passengers via its Abu Dhabi hub.
An Air Berlin spokesman repeated a statement the company made last week, saying it was in advanced talks over options that would have a substantial impact on the airline if implemented, declining to comment further.
It said at the time it was pushing back its annual results by a week to March 27.
Etihad is also in the final phase of due diligence to take an equity stake in loss-making Italian carrier Alitalia.
Banking and industry sources said Etihad was looking at ways of combining Air Berlin and Alitalia to generate synergies and to preserve the German airline’s international traffic rights, Reuters reported.
A tie-up, be it a commercial accord or a full merger, would also probably force Air Berlin to leave the British-Airways-backed Oneworld alliance of airlines and to join SkyTeam, of which Alitalia is a member.