The Portuguese government chose the Lufthansa offer for up to 44.9% of TAP, announced on 14 October, with an initial price of €1,025 million.
The offer rises to €1,201 million once €58 million in timing adjustments and €118 million for the 5% reserved for workers are included.
Lufthansa proposed €1,351 million for the state's remaining 50.1%, of which €863 million in cash and €488 million in shares, a process separate from the first phase.
Lufthansa estimates up to €450 million in annual net synergies, with dividends capped at up to 75% of gains while it stays a minority shareholder, according to figures presented on 15 October.
Lufthansa's airlines run 353 weekly flights to six Portuguese destinations, more than 500 staff work in Portugal, and direct jobs are expected to exceed 1,000 by 2030 at the Santa Maria da Feira centre.
The Portuguese government selected the Lufthansa offer over the rival bid from Air France-KLM for up to 44.9% of TAP Air Portugal, a decision announced by Luís Montenegro on Wednesday, 14 October. The initial price is €1,025 million for the 44.9% holding. Lufthansa adds €58 million in timing adjustments tied to ticket issuance, ground handling and onboard catering, plus €118 million for the 5% of shares reserved for workers, which brings the potential total to €1,201 million.
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The Lufthansa Group welcomed the decision in a statement, saying its strategy keeps TAP's national identity while strengthening Portugal's links with North America and Latin America. The two sides are finalizing the documents and expect to sign the agreements shortly, but completion still needs approval from the competent authorities. The deal is expected to be completed in early 2028.
Lufthansa estimates up to €450 million in annual net synergies from the stake, figures it presented to analysts on the morning of Thursday, 15 October. Most of that value is expected to be generated inside TAP, so Lufthansa and the government agreed a dividend mechanism that would let the German group receive up to 75% of those gains while it remains a minority shareholder. Till Streichert, Lufthansa's finance chief, said the mechanism makes the synergies available without needing majority control. Gains would start to be captured after Lufthansa enters TAP's capital, planned for 2028, and could take up to three years to fully materialize. Lufthansa sees a further €100 million of synergy potential if it acquires the whole airline. Independent analyst Nuno Esteves, who follows TAP, told PÚBLICO that the 75% figure is a potential ceiling rather than a distribution commitment, since dividends will depend on TAP's results and financial position.
Lufthansa has also put forward a further offer of €1,351 million for the remaining 50.1% of TAP still held by the state, of which €863 million would be paid in cash and €488 million through a share swap. In that scenario the Portuguese state would become a shareholder of Lufthansa with a stake of up to 5%, and it would keep an indirect stake in TAP. Till Streichert confirmed the proposal but said the second phase is a separate process subject to new negotiations. Carsten Spohr told analysts on a conference call that a route to 100% of the capital had been discussed with the government, possibly leaving some shares with employees. The government said on 14 October that a second phase could go ahead but that the decision depends on a political assessment. Taken together, the two phases imply a direct valuation of TAP of €2,552 million, above the independent valuations presented to the government, according to SIC Notícias.
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Lufthansa's airlines currently run 353 weekly flights to six Portuguese destinations, a 75% increase in capacity compared with 2019. More than 500 qualified professionals work for Lufthansa Group companies in Portugal. Construction of a new Lufthansa Technik centre in Santa Maria da Feira, near Porto, began in June and is expected to take the number of direct jobs above 1,000 by 2030. The proposal also includes fleet growth of up to 117 aircraft by 2035. Lufthansa says its move would double its market share in Latin America, via Brazil, to 20%, a level comparable with that of IAG. The group also describes Lisbon as a hub that would become the westernmost in its network.
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The offer values the 44.9% holding at €1,025 million, with a second-phase bid of €1,351 million for the remaining 50.1% already under negotiation.
AI text based on reports by Bloomberg Business, PÚBLICO, Correio da Manha and other publishers. Changed . How it is made