The Portuguese Government will negotiate with both Lufthansa Group and Air France-KLM after concluding that their binding offers for a minority stake in TAP received “very similar” overall assessments.
The negotiations will last several weeks and are intended to produce improved proposals. The Government will then select one bidder for exclusive final talks.
Portugal plans to sell up to 49.9% of TAP, including 5% reserved for employees. Any employee shares left unsubscribed could be acquired by the selected investor under a right of first refusal.
The decision will not be based solely on price. The Government is also evaluating proposed investment, fleet development, maintenance activities, sustainable fuels, labour commitments and the protection of TAP’s strategic role. Bidders must provide guarantees concerning the TAP brand, its Portuguese headquarters, the Lisbon hub and routes important to the economy and Portuguese communities.
Air France-KLM says TAP would complement its multi-hub strategy and has proposed a plan covering passenger operations, cargo, loyalty and maintenance. Lufthansa is emphasising TAP’s Brazilian network, expansion at Lisbon and Porto, and its planned Lufthansa Technik facility in Santa Maria da Feira.
The eventual transaction will require approval from Portugal’s Council of Ministers and European competition authorities. The Government also retains the right to abandon the privatisation if the final proposals fail to protect national interests.