“Lasso” between TAP and Lufthansa is given: What's next?

Fhello signed on tuesday direct sale agreement of TAP Air Portugal with Lufthansa, the one that is “one more step in the privatization process, with the State maintaining a majority position of 50.1% of capital”, considered the Minister of Infrastructure, Miguel Pinto Luz, in a publication shared on social networks.

“ It was a demanding path, in which we sought a partner with dimension, experience and ability to add value to TAP, safeguarding Portugal’s strategic interests”, explained the ruler.

Miguel Pinto Luz assured that “Lisbon will remain the company hub“and the “brand and headquarters will remain in Portugal and Porto will be reinforced as a second base”.

“TAP will become stronger, with a fleet that can reach 130 aircraft. Portugal also gains, with more investment in the national aeronautical sector and greater capacity to connect the country to the world and Portuguese communities”, the minister also advanced. 

This operation, he continued, “is the future we are building for TAP, but also for Portugal, in particular by strengthening the country’s connectivity, the competitiveness of the economy and tourism and the ability to attract investment”.

What's next? 

Miguel Pinto Luz detailed that “regulatory authorizations are now followed with the completion of the planned operation by july 2028“.

It should be recalled that on 14 October the Government selected Lufthansa for the partial privatisation of TAP, with a proposal for a eur 1,201 million for up to 49.9% of capital.

The decision was taken in the Council of Ministers after examining the improved binding final proposals submitted by Air France-KLM and Lufthansa – the two groups that reached the decisive stage of privatisation of the Portuguese airline.

According to the Executive, Lufthansa’s financial proposal, which was above EUR 163 million in the choice, was above Air France-KLM and the associated investments, particularly in the fleet, and the proposed governance model were also assessed.

Lufthansa's proposal includes a reference price of EUR 1,025 million per 44.9% of TAP plus EUR 58 million in time adjustments related to the ticket issue rate (‘ticketing fee’), SPdH (former Groundforce, ground-handling company) and Cateringpor (meal services on board), in addition to 118 million for 5% reserved for workers, raising the potential fit to 1,201 million euros.

The reactions

At the signing of the agreement, the executive chairman of the group Lufthansa said, in Lisbon, that the signing of TAP’s partial sales contract is a “very special moment” and said that the government’s decision was an “excellent signal”.

In turn, the Chairman of the Management Board of the TAP stated that the administration and management bodies should remain until the closing of the agreement for partial sale of the company to Lufthansa, ensuring continuity of the strategic plan and value generation.

Also tAP’s “chairman”, Carlos Oliveira, it stated that it does not expect Lufthansa’s entry into the company’s capital to result in cost or function reductions.

On the side of Government, the prime minister stressed that the Portuguese state will be “a loyal and demanding partner” in the relationship with Lufthansa at TAP and reiterated the interest in total privatization, which he classified as “saveguard of the country’s interests”.