Brussels  - Lufthansa is to take over Belgian carrier Brussels Airlines, the two carriers said Monday in Brussels, just over two weeks after confirming they were in merger talks.

In a first step, the big German airline is to pay 65 million euros (91 million dollars) to acquire 45 per cent of Brussels Airlines from SN Holding. Lufthansa can acquire the rest between 2011 and 2014 at a market price not to exceed 250 million euros.

Announcing the deal, Lufthansa chief executive Wolfgang Mayrhuber declined to be drawn on suggestions that Lufthansa might also bid for Austrian Airlines, SAS or Alitalia.

"I'm not surprised our name is being mentioned," was all he would say. "Compared to the others, were are in relatively good shape." He said Brussels Airlines would operate as "a largely independent company" in his group.

It would retain its Brussels head office. The chairman of SN Holding, Etienne Davignon, said jobs at Brussels Airlines were safe.

He said Brussels Airlines would keep up its recently established links with Jet Air of India.

Neither would say if this meant Jet Air would be admitted to the Lufthansa-led code-sharing group, Star Alliance. Mayrhuber said he did not want to encourage any speculation, but added, "India is a major aviation zone."

Lufthansa had disclosed two and a half weeks ago that it was in takeover talks.

Brussels, which emerged from the 2001 bankruptcy of the airline Sabena and later merged with Virgin Express, has a workforce of about 3,000 and carried 5.8 million passengers last year.

It operates mainly within Europe and on long-range routes to Africa.

Lufthansa, which last year completed its takeover of Swiss, is much larger, carrying 63 million passengers last year. It has 100,000 employees.

A Swedish newspaper, Dagens Industri, reported Monday that the Norwegian government had dropped its past opposition to a sale of SAS, which is a partly state-owned company run jointly by Denmark, Norway and Sweden.

Austrian media said the same day that Lufthansa, Air France-KLM and the Russian carrier S7 would likely bid to acquire Austria's state holding company OeIAG's 42.75- per-cent stake in Austrian Airlines.

Austrian is already in the Star Alliance. (dpa)