Air France-KLM plans to keep Alitalia as a separate company overseen by a board of trustees once it has taken over the Italian airline, according to a news report on Sunday citing details of the French offer.
While major unions and some politicians plan protests aimed at stopping the Italian state sell its 49.9 percent stake to the Franco-Dutch rival, Air France-KLM chief Jean-Cyril Spinetta will begin eight weeks of exclusive talks with the government on Wednesday, Il Sole 24 Ore said.
According to the business daily, the Air France-KLM plan envisages keeping Alitalia's company headquarters in Rome, with a board of three trustees – one appointed by Air France, one by the Italian authorities and one agreed mutually -- holding 51 percent of the voting rights.
A similar arrangement was made when Air France bought the Dutch carrier KLM in 2004.
Alitalia was not available for comment on Sunday.
The offer, which values Alitalia shares at around 0.35 euro, would be in the form of a share swap and at most recent market prices would mean the Italian state would get one share in the new company for every 70 Alitalia shares, the paper said.
The Italian state would have a 3 percent stake in the new airline holding company, compared with the French government's 17.8 percent.
Il Sole said the Air France-KLM offer did not specify exactly how it would bid for the other shares in Alitalia not owned by the state. Stock market rules dictate it will have to make a compulsory buyout offer.
In its bid, Air France-KLM demands Alitalia's management strikes a deal with unions over job cuts -- a hard task as Italy's three biggest unions are against the sale, preferring instead a rival bid by Air One, a privately owned Italian airline.
The bid also faces opposition from politicians in and around Milan who oppose plans to down-scale operations at the northern city's Malpensa airport.
Umberto Bossi, leader of the Northern League party, said he would lead a mass protest at the airport on a Saturday in January and was also considering blocking highways.
"The French are buying Alitalia -- a great bureaucratic hulk with tons of problems and a load of debt -- and are closing Malpensa for one reason: to get the routes and steal the customers," Bossi told La Stampa daily.