Etihad Airways has completed its acquisition of a 29% stake in Air Berlin, following regulatory approval from German and Austrian authorities.
The Middle Eastern carrier in December outlined plans to boost its existing 2.99% stake in Air Berlin to 29.21% through a new share issue.
Air Berlin received €73 million ($95 million) through the deal and Etihad is now the German carrier's largest shareholder.
Air Berlin chief executive Hartmut Mehdorn said the collaboration "opens up unique possibilities for joint future market development and provides the pre-requisite for increased synergy and cost optimisation".
The two carriers have already announced plans to enter into an extensive codeshare arrangement, connect their frequent flyer programmes and enter into mutual maintenance agreements.