To be honest it wouldn't be weird at all. EY has started building its empire and there would be a certain logic in them consolidating it. They created "Etihad Regional" with Darwin a few months ago, and ultimately, they are probably wanting to build a "Etihad Europe" sort of network although limited with regulations on ownership limitation.

That said, when and if it happens, I would be surprised if any of us could predict what will happen in terms of alliances etc. AB has been an odd OW partner for a while now. They have close agreements with AF KL already (and indeed symbolically use the AF lounge and not the BA one at TXL), but then, at the same time, AZ have now significantly distanced themselves from AF-KL. They are still part of the JV but have stopped codesharing on a number of AF flights.

So frankly, a hypothetical unified airline made of EY's European subsidiaries could possibly stay in OW, more probably stay in ST (it is also not entirely impossible that at one point, EY might try to invest in AF the way QR has invested in BA), quite possibly stay in neither.