* Etihad to take close to 50 pct stake - report
* Sabanci family, smaller investors to be bought out-report
* Air Berlin declines comment
* Etihad eyes combination of Air Berlin, Alitalia-sources
(Adds more details, sources on mooted Air Berlin-Alitalia
FRANKFURT, March 22 Ailing German airline Air
Berlin, almost 30 percent owned by Abu Dhabi-based
Etihad Airways, will be delisted and Etihad will raise its
stake to 49.9 percent, a German weekly reported, possibly as a
prelude to combining it with Alitalia.
Citing company sources, WirtschaftsWoche magazine said a
group of German shareholders, among them former and current
company executives, would raise their stakes to hold more than
50 percent between them, preserving the carrier's German status.
Air Berlin, Germany's No.2 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 percent of the group's
shares, would be bought out, WirtschaftsWoche said, adding
Turkey's Sabanci family would also exit. The family's investment
vehicle ESAS owns 12 percent, Air Berlin's website said.
Etihad has been building a network of airlines by buying up
minority stakes as it seeks to channel more passengers from its
partners' planes to its Abu Dhabi hub.
Officials at Etihad were not immediately available for
comment on the WirtschaftsWoche report.
An Air Berlin spokesman repeated a statement the company
made on Wednesday, 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 troubled Italian flagship carrier Alitalia,
which is burdened with more than 800 million euros of debt and
is facing increased competition.
Talks have intensified and sources close to the matter said
Etihad might be interested in buying a stake of up to 40 percent
in the Italian carrier.
Banking and industry sources said Etihad was looking into
ways to combine Air Berlin and Alitalia to generate synergies
and to preserve Air Berlin's international traffic rights.
These discussions are at an early stage and any deal would
likely face challenges from Rome and Italy's organised labour,
who have already fought several attempts to end the independence
of the country's loss-making flagship carrier.
A tie-up, be it a commercial accord or a full merger, would
also probably force Air Berlin to leave the Oneworld alliance of
airlines and to join SkyTeam, of which Alitalia is a member.
With such a tie-up, Etihad would widen an air traffic empire
that already stretches from the Seychelles to Ireland and
Australia, gaining access to populous regions and lucrative
routes. It has also entered into a strategic code-share deal
with Air France-KLM.
WirtschaftsWoche said that Etihad boss James Hogan would
seek the German government's backing for the Air Berlin deal,
which would be worth more than 100 million euros ($138 million).
Air Berlin ran into financial problems after expanding too
rapidly in the last decade. It faces stiff competition from the
likes of easyJet, which is expanding in Germany and
trying to tempt business customers in Europe's largest economy.
In November, Air Berlin scrapped its aim of breaking even at
the operating profit level in 2013 and warned it would only come
close to analyst forecasts for a 40 million euro loss before
interest and tax if it found additional sources of income.
($1 = 0.7189 Euros)
(Reporting by Praveen Menon in Dubai, Peter Maushagen and
Ludwig Burger in Frankfurt, Agnieszka Flak in Milan.; Additional
reporting by Stanley Carvalho and Arno Schuetze; Editing by Mark
Potter and Gareth Jones)