Germany’s Lufthansa has won out over Air France-KLM in the competition to acquire a 44.9% stake in Portugal’s national carrier, TAP Air Portugal, the Portuguese government announced Wednesday in Lisbon, bringing an end to a closely watched privatization battle.
Lufthansa agreed to pay €1.2 billion for the stake, valuing TAP at roughly €2.55 billion, or about $2.8 billion. Portuguese Prime Minister Luis Montenegro said the German carrier’s offer came in 16% higher than the rival bid from Air France-KLM.
Montenegro pointed to both the higher price and the structure of Lufthansa’s offer as decisive factors, noting it carried a lower degree of uncertainty than the competing proposal. Lufthansa reportedly offered to pay entirely in cash, while Air France-KLM’s bid combined cash with shares in the Franco-Dutch group, an arrangement that would have exposed Portugal to swings in Air France-KLM’s own stock price.
The deal would bring TAP's Lisbon hub more fully into Lufthansa's network, giving the group a stronger southern European gateway and access to TAP's long-haul connections to Brazil and Portuguese-speaking Africa, markets where the Portuguese carrier has traditionally held a strong competitive position.
The outcome marks another step in Lufthansa's broader strategy of acquiring stakes in smaller European flag carriers, following earlier moves involving ITA Airways in Italy and SAS in Scandinavia, as the German group continues consolidating its position across the continent's aviation landscape even as regulators keep a close eye on the pace of that consolidation.
