After months of deliberations, the Portuguese government on Wednesday selected the Lufthansa Group to take a minority position in TAP Air Portugal.
The German airline conglomerate offered €1.025 billion for a 44.9% stake in the Lisbon-based flag carrier. That amount could increase up to €1.2 billion for the acquisition of a 49.9% stake as discussions continue, officials said.
Lufthansa’s only competition was Air France-KLM, which confirmed in July that it had submitted a bid for the full 49.9% stake.
“With today’s decision, the Portuguese government has paved the way for TAP Air Portugal to continue this success story together with Lufthansa Group,” Chairman and CEO Carsten Spohr said in a statement. “At the same time, this allows us to consistently pursue our internationalization strategy and sustainably strengthen our position in the South Atlantic market.”
As part of its offer, the Lufthansa Group cited its existing investments in Portugal – including a new Lufthansa Technik facility in Santa Maria da Feira – and its history of growing European subsidiaries while helping them retain their national character.
The company also said it would strengthen Lisbon’s position as a “strategically important Atlantic hub” within its network.
TAP Air Portugal is being reprivatized after operating for several years as a state-owned enterprise. Under the government’s current plan, Lufthansa Group will own at least 44.9% of TAP, the carrier’s employees 5%, and the Portuguese state the remainder.
Lufthansa Group said it is now working with the Portuguese government to finalize the transaction.