Alitalia's board agreed to sell a 25 per cent stake to Air France-KLM yesterday, a source close to the carrier said, giving the French airline wider access to a vibrant market after years of intermittent courtship.
After a week of frenetic talks with politicians hoping for a last-minute coup for rival Lufthansa, Italian Prime Minister Silvio Berlusconi said time had run out for the German carrier and that Air France-KLM had clinched the deal.
Air France-KLM and Lufthansa had been locked in a battle for more than three months over the stake, which offered a quick avenue to tap into Italy's bustling aviation market that meshes busy business routes in the north with heavy tourist traffic.
The German carrier, which had the open support of Berlusconi, never formally ruled itself out of the running and says it is still in contact with Alitalia, but last week confirmed it did not make a firm offer.
Meeting at its headquarters near Rome's Fiumicino airport yesterday, Alitalia's board agreed to accept Air France-KLM's offer to buy a stake, the source said.
Air France-KLM is expected to pay more than €300 million (Dh1.48 billion) for a 25 per cent stake, with Italian media reporting it could fork out as much as €310m. The airline will be formally relaunched today as a smaller, regional carrier.