New Delhi, January 19:

Jet Airways has sealed India’s largest acquisition yet in the civil aviation industry with an agreement to take over rival Air Sahara for an estimated $511 million in cash, officials said.

The board of directors of Jet Airways met here today to approve the deal and will now forward the proposal to the director general of civil aviation — the regulator for the industry — for an official nod, a Jet official said.

The deal was struck after talks yesterday evening between the two sides led by Jet promoter Naresh Goyal and Air Sahara chief Subroto Roy in Lucknow.

The deal will make Jet India’s largest airline — even larger than state-owned Indian Airlines — with a 90-aircraft fleet, officials said.

Jet is already the number one private airline in the country, with a 40 per cent market share in the domestic aviation sector and with the new deal, the market share would go up to more than 50 per cent, aviation industry sources said. Air Sahara had said in September that it was looking at opportunities for alliances and partnerships to fund expansion and that its advisers Ernst and Young had put its enterprise value at $750 million to $1 billion.

Following this, many in the aviation industry had stepped forward to strike a deal, including Vijay Mallya’s UB group that operates Kingfisher Airlines, which had pegged Air Sahara’s worth at $600 million.

The proposal called for UB group paying in cash $200 million upfront, the retention of stake worth another $200 million by the Air Sahara’s promoters and raising the remaining by way of a public issue. But UB was out of the race, since Sahara favoured the entire amount in cash. Jet was willing to acquire the entire company. Sahara, which began operations just months after Jet in 1993, is part of the $12 billion Subroto Roy’s Sahara Pariwar group and has interests spa-nning para-banking, fina-nce, housing, power and media. Jet and Sahara were on the verge of striking a deal on January 11 but the talks had failed due to differences.