Lufthansa wins €1.2bn bid for 44.9% stake in TAP Air Portugal
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Lufthansa Group has won the bid for a 44.9% stake in TAP Air Portugal, beating rival Air France-KLM in the Portuguese government’s airline privatisation process.
Portuguese broadcaster RTP reported that Portuguese Prime Minister Luís Montenegro announced the decision on 14 October 2026, following an extraordinary cabinet meeting.
“Having evaluated the bids, the Government has decided in favour of Lufthansa Group, whose financial offer is 16% higher than the competing bid and carries a lower degree of uncertainty,” the Prime Minister said.
According to Montenegro, “this is the best choice for the company’s future and the one that best protects the national interest.”
Confirmed financial terms of Lufthansa’s TAP acquisition
Lufthansa’s winning proposal values TAP Air Portugal at €2.552 billion across two phases. The initial transaction covers up to 49.9% of the airline for €1.201 billion.
A proposed second phase would see Lufthansa acquire the Portuguese government’s remaining 50.1% stake for a further €1.351 billion, comprising €863 million in cash and a 5% shareholding in the enlarged Lufthansa Group valued at €488 million. The second phase remains subject to further decisions and approvals.
- Winning bid: €1.201 billion
- Stake: 44.9% of TAP.
- Winning margin: Lufthansa’s offer was 16% higher than Air France-KLM’s.
- Government ownership: Portugal will initially retain 50.1%.
- Employee shares: Up to 5% reserved for TAP employees.
- Completion: Final negotiations and EU regulatory approvals remain outstanding. Completion is expected in 2028.
This figure is “far above the independent valuations projected a few years ago, or even just a few months ago,” the Prime Minister added.
Lufthansa and Air France-KLM compete for TAP
Lufthansa and Air France-KLM submitted their final improved offers on 30 September, after the Portuguese government requested revised proposals. The government had previously determined that the competing bids were close enough to warrant another round of negotiations.
Under the privatisation plan, Portugal intends to sell 44.9% of TAP to a strategic investor, with a further 5% reserved for employees. The state would retain a 50.1% holding.
The government’s official privatisation criteria include the purchase price, financial strength, investment commitments, route connectivity and the airline’s long-term development.
International Airlines Group (IAG), the parent company of British Airways and Iberia, first expressed interest but withdrew from the competition, submitting a non-binding bid in April.
As AGN previously reported, Lufthansa and Air France-KLM were the only remaining bidders.
Why TAP matters to Lufthansa
TAP’s network would strengthen Lufthansa Group’s presence in Portugal and grant access to the airline’s extensive connections with Brazil, Portuguese-speaking African countries and North America.
Lisbon is an important connecting hub for transatlantic traffic, particularly between Europe and South America.
TAP is already a member of Star Alliance, alongside Lufthansa, making the two airlines existing commercial partners.
Lufthansa Group also owns or controls several European airlines, including SWISS, Austrian Airlines, Brussels Airlines and ITA Airways.
In the announcement of its initial binding bid in July, Lufthansa Group CEO Carsten Spohr said:
“For decades, we have been investing in Portugal, creating and securing skilled jobs, and connecting the country with Europe. Our interest in taking a stake in our Star Alliance partner TAP Air Portugal is the next logical step.”
Air France-KLM had also sought to develop Lisbon as a southern European hub within its network, with plans to strengthen connectivity through Portugal.
Portugal’s government has emphasised the importance of protecting TAP’s national identity, maintaining connectivity and supporting investment in its fleet and operations.
“Our ambition is to give wings to TAP so that it flies more and more and flies further and further,” said Montenegro, adding that the deal brings “hope to all Portuguese.”
