The Air France-KLM board of directors on Friday gave its green light to an alliance with Italian carrier Alitalia, well informed sources said.
The Franco-Dutch airline is expected to offer some 300 million euros for a 25% share in the former Italian state carrier.
The new board at Alitalia is set to meet on Monday to approve the Air France-KLM offer and alliance.
Alitalia's flight operations were sold to a private Italian investor group, Compagnia Aerea Italiana (CAI), on December 12 and the airline's new incarnation as a private carrier will officially take place in the early morning hours of January 13, with the arrival of a flight from from London.
Air France-KLM has always been considered to be Alitalia's natural partner and the two airlines were already allied in the international SkyTeam group.
With a 25% stake, Air France-KLM will become the majority stockholder in Alitalia but it will not be able to buy the rest of the airline for a five-year period due to a lock-up clause in the CAI statue.
However, it can increase its stake in the event of a rights issue to recapitalize the airline
Last year Air France-KLM made an offer to buy all of Alitalia but the plan was torpedoed by the airline's unions and opposition from center-right parties, including the Northern League, which later went on to win general elections in the spring.
In August the new center-right government changed Italy's bankruptcy laws to allow Alitalia's flight operations to be spun off and sold and encouraged the creation of CAI, which was specifically set up to buy Alitalia and keep it ''Italian''.
The 'old' Alitalia's remaining assets will be sold or liquidated, including its debts of over two billion euros.
