Portugal’s government has chosen Lufthansa to acquire a 44.9% stake in TAP Air Portugal, making the German airline the strategic partner of one of Europe’s last independent flag carriers, two people familiar with the matter told Reuters on Wednesday.
Lufthansa beat rival Air France-KLM after both airlines submitted improved final bids for TAP in late September.
The government will announce the terms of the deal in a news briefing later on Wednesday.
Lufthansa, as reported earlier, is offering an all-cash deal for its stake in TAP Air Portugal, while rival bidder Air France-KLM has proposed a mix of cash and shares in the Franco-Dutch airline.
The German group’s stronger financial position was also cited as a key factor in the evaluation process. Portugal’s Infrastructure Ministry declined to comment on the matter.
Both Air France-KLM and Lufthansa submitted final bids for the TAP stake in September, after the Portuguese government asked both suitors to improve their offers. The government is now set to choose the winning bidder at an extraordinary cabinet meeting scheduled for Wednesday.
TAP Air Portugal is Portugal’s flag carrier and largest airline, headquartered in Lisbon and operating out of Lisbon Humberto Delgado Airport as its main hub. Founded in 1945, the airline connects Portugal with Europe, Africa, the Americas, and Brazil, where it has one of the strongest networks of any European carrier due to historic ties.
TAP is a member of the Star Alliance and operates a fleet focused on Airbus aircraft, serving more than 80 destinations worldwide. Known for its Atlantic bridge strategy, the airline plays a key role in tourism and trade for Portugal.
The company has been majority state-owned for most of its history, but has faced financial challenges and restructuring in recent years.