Portugal picks Lufthansa as preferred bidder for TAP Air Portugal stake

Portugal's government has named Lufthansa Group as its preferred buyer for a partial sale of TAP Air Portugal, beating Air France-KLM. Final talks and regulatory clearances are still outstanding.

The first stage covers up to 49.9% of TAP's capital. Lufthansa would take 44.9%, with as much as 5% held for employees, leaving the Portuguese state as majority owner. Prime Minister Luís Montenegro said Lufthansa's financial offer was 16% above the rival bid and carried fewer uncertainties.

The government put first-phase proceeds at €1.201 billion. It is also weighing a transfer of its remaining holding by 2028, paid for with cash and shares in Lufthansa's parent company. Montenegro said the second-phase proposal adds €488 million in cash and a share swap that could make Portugal the group's second-largest shareholder.

Under the bid, TAP keeps its brand, its Portuguese head office and its Lisbon hub. Island links and job-stability commitments are also part of the plan. TAP would stay in Star Alliance and act as the group's platform for Brazil and other Portuguese-speaking markets, while Porto would take on a second base role with eight long-haul jets.

The fleet plan foresees 117 aircraft by 2035 and 130 after that, including eight Airbus A350-900s transferring in after 2030 and a renewal of Portugália's regional fleet. TAP's maintenance and engineering arm would join Lufthansa Technik.