TAP: Portugal chooses Lufthansa for 1.2 billion and a 44.9 per cent stake in the company
The German group has overtaken Air France-KLM to become a strategic partner. At the heart of the deal are the Lisbon hubs and connections to Brazil and Africa
Portugal has chosen Lufthansa to lead the turnaround of TAP Air Portugal. The Lisbon government has announced that the German group has been selected to acquire a 44.9 per cent stake in the national airline, worth 1.2 billion euros. The German airline has the option to increase its stake to 49.5 per cent should the 5 per cent reserved for employees not be exercised. The deal establishes Lufthansa as the strategic industrial partner of one of the last European national carriers still independent of a major international group.
The decision marks a significant milestone in a privatisation process that began several years ago and has been postponed on several occasions, forming part of the wider transformation of European air transport. The aim is to strengthen the competitiveness of national airlines through integration into larger groups, which can provide greater financial resources, economies of scale and a more extensive commercial network.
Lufthansa has prevailed over Air France-KLM, the other main contender for a stake in TAP. Both groups had submitted improved final bids at the end of September, but the German proposal was more convincing to the Portuguese authorities.
According to a statement made by Prime Minister Luis Montenegro during a press conference, the winning bid was 16 per cent higher than that of the Franco-Dutch competitor.
The price, however, was not the only decisive factor. The government also assessed the business plans submitted by the two groups, paying particular attention to TAP’s growth prospects, its long-term sustainability and the future partner’s ability to develop the company’s operations within the Portuguese airport system.
