Air France-KLM ousted, Lufthansa wins the race for the partial privatization of TAP Air Portugal

The German group Lufthansa won the race for the partial privatization of TAP Air Portugal to the detriment of the Franco-Dutch Air France-KLM, announced Portuguese Prime Minister Luis Montenegro on Wednesday October 14. In order to acquire 44.9% of the capital of the Portuguese national company, Lufthansa, which is already the leading European air transport group, made an offer worth 1.2 billion euros, he said.

“After examining the proposals, the government's decision falls on the Lufthansa group, whose financial offer is 16% higher than the competing offer,” declared the head of the center-right government, during a press conference following a council of ministers.

The Portuguese State remains the majority shareholder

While a 5% stake remains reserved for employees for the moment, the Portuguese State intends to retain at least 50.1% of TAP's capital in order to preserve the national identity of the company, its headquarters in Portugal and the strategic role of Lisbon as a platform for connections to Brazil and Africa.

The partial privatization of the Portuguese company, which has some 7,700 employees and around a hundred Airbus aircraft, comes following its emergency nationalization in 2020 to deal with the consequences of the Covid-19 pandemic. In return for public aid of 3.2 billion euros, the Portuguese carrier had to implement a restructuring plan launched in 2021 under the aegis of the European Commission. Its privatization had been under study since 2023, but the process was suspended by the fall of the Portuguese government at the time.

After expressing its potential interest, the IAG group, parent company of British Airways and the Spanish Iberia, finally withdrew from the race. Air France-KLM and Lufthansa began by submitting binding offers considered very close by the Portuguese authorities, who invited them to improve their proposals.