Lufthansa Wins Bid for 44.9% Stake in TAP Air Portugal, Edging Out Air France-KLM

Lufthansa Group has been selected as the winner in a bid for a 44.9% stake in TAP Air Portugal, according to reports. 

The government was expected to name the winner at an extraordinary cabinet meeting on Wednesday, October 14. According to SIC, Lufthansa’s offer is all cash. Air France-KLM, the other group that submitted a binding bid, proposed a mix of cash and shares in its own company. The financial details of both offers have not been published.

Selecting a preferred bidder does not complete the sale. Further negotiations, regulatory approvals and a final contract all remain. Reporting on the deal says Lufthansa’s stronger financial position was also a factor in its favor.

How the Sale Is Structured

Portuguese law allows the government to sell up to 49.9% of TAP, with the state staying the majority shareholder. Of that, 44.9% is earmarked for a strategic investor and up to 5% is reserved for employees. 

Any part of the employee tranche that staff do not take up may be bought by the chosen investor.

The government has said it will weigh the purchase price, the bidder’s financial strength, investment commitments, route connectivity and long-term development. The capital injection is expected in the summer of 2027, though the chosen investor could begin sharing in management earlier.

Who Bid

In April, the Council of Ministers advanced Air France-KLM and Lufthansa to the binding-offer round and gave them 90 days to submit proposals. Both did so at the end of July. IAG, the owner of British Airways and Iberia, was not among them. In an official statement dated April 2, it said it was withdrawing after careful consideration and would prioritize growth within its existing brands.

Lufthansa’s Position

Lufthansa already owns airlines including Swiss, Austrian Airlines and Brussels Airlines, and it holds a minority stake in Italy’s ITA Airways. It bought 41% of ITA for €325 million, completing the purchase on January 17, 2025, after European Commission approval. It has since said it will exercise its option to raise that to 90% for a further €325 million. That deal still needs regulatory approval, and full majority control is expected in the first quarter of 2027.

TAP is a member of Star Alliance, as are the Lufthansa Group airlines.

What Comes Next

Several steps remain before any change of ownership. The government must formally announce its choice and negotiate contract terms with Lufthansa. The sale will then need regulatory clearance, including review by European Union competition authorities.

The decision also leaves open how the government will protect Portuguese interests after the sale. It has listed route connectivity among its criteria, but the shareholder agreement that would set out the state’s rights has not been published.

The price Lufthansa offered has not been disclosed. Neither have the investment commitments, the plans for jobs, or how closely TAP would be integrated with Lufthansa’s other airlines.