Lufthansa has been selected as the winner of Portugal's partial privatization of TAP Air Portugal, the government announced Wednesday following an extraordinary Cabinet meeting.
Prime Minister Luís Montenegro announced the decision after the Council of Ministers evaluated final binding proposals from Lufthansa and Air France-KLM, the two groups that advanced to the final phase of the bidding process.
Lufthansa's proposal was valued 16 percent higher than Air France-KLM's offer and presented a lower degree of uncertainty, according to officials. The German carrier will assume executive and operational management of TAP.
The transaction involves the sale of up to 49.9 percent of TAP's capital, with 44.9 percent allocated to the winning bidder and up to 5 percent reserved for employees. The Portuguese state will maintain a majority stake of 50.1 percent, preserving control of the company and future value appreciation of its holding.
The initial financial injection from this first phase totals 1.201 billion euros. Lufthansa's full proposal represents a total valuation of 2.552 billion euros for the airline.
Montenegro stated that the decision reflects "the best choice for the company's future and the one that best protects the national interest." He characterized the process as one conducted "with rigor" and "total transparency."
Following the selection of the winner, the Council of Ministers must approve contractual instruments, including the share purchase agreement and shareholders' agreement. The operation still requires approval from the European Commission's Directorate-General for Competition (DGComp).
The Finance Minister indicated that DGComp authorization is expected within 18 to 24 months. The complete privatization process is projected to conclude in 2028.
Lufthansa has previously stated its ambition to establish TAP as its "main airline for the South Atlantic" operating from Lisbon.