Aegean Airlines has agreed to acquire 100% of Olympic Air from Marfin Investment Group (MIG) - which bought the carrier in 2009 following its privatisation - for a total consideration of €72 million ($94 million).
A previous merger attempt between the two carriers was blocked by the EU in January 2011, and competition authorities have yet to approve the latest deal.
Provided the acquisition gets the go-ahead from Brussels, regulators will determine the timeline for transforming Olympic Air into a subsidiary of Aegean. Both carriers will retain their own brands, aircraft and staff.
Aegean chairman Theodoros Vassilakis says the deal is vital to ensuring both airlines build economies of scale and become competitive on an international level.
"The two companies contribute in excess of €270 million to the Greek state revenues," he notes. "However, our sub-scale size - combined with the effects of the unprecedented Greek crisis - restrict our ability to successfully compete within the European and global aviation market."
Aegean posted losses of €27.2 million in the 2011 financial year, while the smaller Olympic Air lost €37.6 million.