Germany's Lufthansa said on Thursday that it will buy a 19 percent stake in the low-cost U.S airline, Jet Blue, in a deal worth nearly $300 million.

The purchase price represents a roughly 16% premium to Wednesday's closing price of $6.25. Lufthansa will get a seat on JetBlue's board and own 19% of JetBlue's equity after the share issuance.

U.S stock law currently stipulates that a domestic airline must retain 75% of its voting shares.

JetBlue Chief Executive Dave Barger said the deal is simply a financial transaction for now.

At this point in time it's strictly a minority investment and we'll see where the future takes us with exploring other opportunities, Barger said on an investor conference call.

The carriers anticipate the transaction will close in the first quarter of 2008. They say it represents the first significant investment by a European air carrier in a U.S. point-to-point air carrier.

Under the terms of the deal, a Lufthansa nominee will be appointed to JetBlue's board. The nominee will come up for election at JetBlue's annual meeting next year.

Our investment reflects the confidence we have in JetBlue's quality, growth potential and management team, said Lufthansa Group Chairman and Chief Executive Wolfgang Mayrhuber.

JetBlue needs regulatory but not shareholder approval for the deal.