Turkish Airlines has signed a deal to buy around one-quarter of Spanish carrier Air Europa, the airlines said on Thursday.

Turkish Airlines is to invest 300 million euros ($355 million) in convertible debt, which will be exchanged for a stake expected to be in the range of 25 percent to 27 percent, under a deal agreed in August.

Spain's Hidalgo family, through Globalia, will continue to be the majority shareholder of Air Europa, while British Airways owner IAG will retain its current 20 percent stake through the purchase of shares from Globalia.

Turkish Airlines beat European rivals Lufthansa and Air France-KLM to secure the agreement to share control of the carrier with the Hidalgo family.

Turkish Airlines has said it has no plans to increase the stake.

The transaction, which will close once regulatory requirements have been met in about 6 to 12 months, values Air Europa at approximately 1.2 billion euros ($1.4 billion).

The deal comes as airlines are looking to consolidate the continent's fragmented market by snapping up smaller, struggling operators.

After announcing the deal, Air Europa said it had repaid a loan of almost 500 million euros (~$575 million) from Spain's state-owned industrial holding company SEPI one year ahead of schedule.