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The Portuguese government announced on Wednesday that Germany's Lufthansa won the contest to acquire 44.9% of TAP Air Portugal, according to O GLOBO. Air France-KLM had also been competing for the stake in Portugal's flagship carrier.
Lufthansa's bid came in 16% above what Air France-KLM offered. The first phase of the deal is valued at €1.201 billion (R$6.74 billion), O GLOBO reports. The Portuguese state will retain control of the company, while Lufthansa takes charge of executive and operational management.
The winning proposal values TAP at €2.552 billion (R$14.32 billion) in total. That is a sharp rise from the airline's earlier assessments: in 2023 the company was valued at between €700 million (R$3.93 billion) and €1.709 billion (R$9.59 billion), a figure that later dropped to €350 million (R$1.96 billion), according to the Portuguese government. The integration places TAP inside Europe's largest airline group and the fourth-largest in the industry worldwide.
Why it matters
The sale ends a long privatization process and reshapes competition in European aviation, particularly on routes between Europe and Latin America. TAP's network across Brazil and Africa made it a prized target for the continent's biggest carriers, and the outcome hands Lufthansa a stronger position in southern Europe.
For Portugal, the deal is framed as a way to secure the airline's long-term future. Founded in 1945, TAP received billions of euros in state aid during the pandemic and posted a loss of €99 million (US$112 million) in the first half of the year, as higher fuel costs weighed on its results. Portuguese authorities argue the carrier needs to belong to a larger group to gain scale.
What each side offered
Under the agreed structure, 5% of the shares will be reserved preferentially for TAP employees. The remaining 50.1% stays with the Portuguese state, preserving both a majority of the capital and control of the company. Lufthansa's share could grow further if TAP staff decline their allocation.
A second phase, expected by 2028, would let the Portuguese government exchange its remaining capital for an equity stake in the Lufthansa group holding. That stage includes an additional €480 million (R$2.685 billion) and the possibility of a share swap, which could make the Portuguese state the second-largest shareholder in Lufthansa.
Lufthansa's proposal also carries other commitments: €500 million (R$2.796 billion) for a new pilot school, plus an innovation center and corporate services facilities. The TAP brand will be kept, along with connectivity to Portugal's autonomous regions and a reinforcement of strategic routes.
TAP said in a statement that Lufthansa's future entry will strengthen its development prospects and its position in the markets where it operates. According to the airline, the selected proposal preserves the brand, the headquarters in Portugal and the Lisbon hub, and covers development of operations in Porto, fleet expansion and the importance of its Maintenance and Engineering division.
The Portuguese carrier described the decision as a significant step in the reprivatization process, which will continue with the signing of contractual agreements and the required regulatory approvals before the transaction closes and the new shareholder formally joins TAP's capital. During that period, TAP said it will stay focused on executing its 2026-2035 strategic plan. Carlos Oliveira, chairman of TAP's board, said the company reaches this moment after a long journey, according to the airline's statement.
A contest decided on price and investment capacity
Lufthansa and Air France-KLM submitted improved final offers in recent weeks. Beyond price, sources cited by O GLOBO point to Lufthansa's greater investment capacity and its advocacy for building a new Lisbon airport as quickly as possible.
Air France-KLM had proposed making Lisbon its exclusive hub for southern Europe and strengthening TAP's connectivity, especially across the North Atlantic. In a social media post, Air France chief executive Ben Smith said Brazil would be central to that strategy and that a partnership with Delta Air Lines would widen Portugal's connections. He said the aim was to build a stronger bridge across the Atlantic, north and south, particularly with Brazil, and that with Delta's support and their transatlantic joint venture, TAP would be linked to a network of more than 375 destinations.
Brazil carries substantial weight for TAP. The airline serves 15 Brazilian cities across 17 routes to Lisbon and Porto, and Brazil accounts for 30% of the Portuguese group's revenue. Lufthansa, meanwhile, flies from Rio de Janeiro and São Paulo to Germany.
Lufthansa operates 737 aircraft with hubs in Frankfurt, Munich, Zurich, Vienna, Brussels and Rome. It is a member of Star Alliance and its group includes Swiss, Austrian Airlines, Brussels Airlines, ITA Airways and Eurowings.
Attention now turns to the European Commission, whose review of the deal is expected to take between 18 and 24 months. Co-management at TAP is due to begin later this year, according to sources. In September, Lufthansa said its goal was to support TAP's growth, sharpen its competitiveness and reinforce its role as Portugal's flag carrier.
