Lufthansa wins bid for 44.9% stake in TAP Air Portugal

The Portuguese government announced on Wednesday that Lufthansa Group has been selected to acquire a 44.9% stake in TAP Air Portugal, the national carrier, in the first phase of its privatisation. The decision was made after evaluating bids from Lufthansa and Air France-KLM, with the German group’s offer deemed superior both financially and in terms of certainty. Prime Minister Luís Montenegro stated that the government is “successfully bringing to a close the first phase of the privatisation of our national airline,” a process conducted with strict respect for competition, rigorous negotiations, and complete transparency. He added that Lufthansa’s financial offer was 16% higher than the rival proposal and carried a lower degree of uncertainty.

Transaction details and strategic commitments

The transaction will bring €1.201 billion in this first phase, while the state retains a majority stake of 50.1%. Lufthansa will be responsible for executive and operational management of the airline. The offer values TAP at €2.552 billion, a figure the prime minister described as far above independent valuations from recent years or months.

Montenegro emphasised an ambitious strategy for the aviation sector, including airport infrastructure. He said the government is ensuring growth in TAP’s fleet, passenger numbers, destinations, routes, and investment across the aeronautics sector in Portugal. The proposal includes a €500 million pilot training school in Tancos, an innovation centre in Aveiro, a corporate services centre, and a previously announced Lufthansa Technik investment in Santa Maria da Feira. The prime minister projected 3,000 jobs linked to TAP’s growth and a total of 5,500 direct and indirect jobs from all investment initiatives.

Infrastructure and Housing Minister Miguel Pinto Luz detailed the offer, which includes fleet expansion to 117 aircraft by 2035 and 130 after 2035, with up to eight Airbus A350-900s transferred to TAP from 2030 onwards. Investments are planned for Francisco Sá Carneiro Airport, Faro Airport, and airports in Portugal’s autonomous regions. Under the privatisation decree, Lufthansa may also purchase shares not bought by employees, who are reserved 5% of the capital. The process is expected to conclude in 2028 after European Commission approval, according to Finance Minister Joaquim Miranda Sarmento.