Lufthansa Group has secured a minority stake in TAP Air Portugal after its bid of up to €1.2 billion was selected over a rival offer from Air France-KLM.
Portugal’s government announced on Wednesday (14 October) that Lufthansa’s bid for a 44.9 per cent shareholding in state-owned TAP Air Portugal had been accepted. An additional 5 per cent shareholding in TAP has been reserved for the airline’s employees, with the government maintaining a 50.1 per cent majority stake.
Air France-KLM had offered €1.04 billion for the minority stake with another €100 million to be paid if TAP achieved several financial targets by 2028.
Both aviation companies had submitted improved bids for the stake in TAP earlier this month. TAP is seen as being a valuable addition due to its strong route network from Lisbon to Brazil.
“This marks a new phase for TAP. It is a strategic partner for growth, with Lisbon serving as a hub and the Portuguese identity preserved,” said the government in a statement.
The government added that the deal would allow TAP to offer “greater scale and enhanced connectivity”, with Lufthansa responsible for executive and operational management of TAP.
Lufthansa Group CEO Carsten Spohr said in a statement: “TAP Air Portugal is a strong and profitable airline, our longstanding partner in Star Alliance and internationally successful as a leading carrier on South Atlantic routes.
“With today’s decision, the Portuguese government has paved the way for TAP Air Portugal to continue this success story together with Lufthansa Group. At the same time, this allows us to consistently pursue our internationalisation strategy and sustainably strengthen our position in the South Atlantic market.”
Portugal’s government has been attempting to privatise TAP for several years, with prime minister Luís Montenegro hoping to eventually sell the rest of the airline to Lufthansa, according to reports in the Portuguese media. But this will depend on securing enough support in Portugal’s parliament for a full sale.
Montenegro said in a statement: “The government has successfully completed the first phase of the privatisation of our airline. It has been a process carried out under strict competitive conditions, tough negotiations and with complete transparency towards the Portuguese public.”
Under the terms of the deal, Lufthansa is paying an initial €1.025 billion for a 44.9 per cent stake in TAP but this could rise to €1.2 billion for a 49.9 per cent shareholding, depending on how many employees decide to take up the offer of shares in the airline.
The sale of TAP is seen as another major step in the consolidation of Europe’s airline industry following Lufthansa’s acquisition of a 41 per cent stake in ITA Airways in 2025, which is set to rise to 90 per cent in 2027. Lufthansa has also secured a 10 per cent stake in Latvian carrier AirBaltic.