The Lufthansa Group and the Portuguese Government have signed an agreement this Tuesday so that the German consortium acquires an initial minority stake of 44.9% in TAP Air Portugal, valued at 1.025 billion euros and paid for entirely with available liquidity.
The transaction remains pending approval from the competent regulatory authorities, especially the European Commission, the company said in a statement.
If the purchase of the shares reserved in the first instance for employees is ultimately carried out, Lufthansa’s position could rise to up to 49.9%, which would place TAP’s total valuation at around 1.2 billion euros.
The CEO of the German group, Carsten Spohr, described today’s signing as an "excellent sign" that anticipates a favorable future for both airlines, stressing that their networks fit to "perfection" and provide them with "new opportunities" for expansion in Portugal and, especially, in South America and Brazil.
For the Lufthansa Group, strengthening its position in the corridor between Europe and Latin America has "crucial strategic importance," since its current share is around 9%, but the combination with TAP would allow it to reach approximately 20%, placing it at the level of IAG and ahead of Air France-KLM.
"Lisbon will become the seventh operations hub of the Lufthansa Group. In addition to Lisbon, Oporto, the Azores, Madeira and the Algarve are also key elements of the growth strategy," he said.
Fleet expansion, new investments and reconfiguration of the board
Lufthansa’s proposal, which prevailed over that of Air France-KLM in the TAP sale process, provides for expanding the Portuguese airline’s fleet to 117 aircraft by 2035 and 130 from that date. Likewise, the transfer of up to eight Airbus A350-900 to TAP is planned starting in 2030.
In the investment chapter, the plan includes around 300 million euros in Portugal and the creation of 700 jobs in Santa Maria da Feira in the maintenance and engineering area, along with an additional investment in an aeronautical training school in Tancos.
With regard to the board of directors, five of the nine members, including the chair, will be appointed by the Portuguese State. In turn, Lufthansa will appoint three executive directors and the Portuguese Government will appoint an additional director.
Historical presence of Lufthansa in Portugal
The Lufthansa Group has accumulated more than 70 years of activity in Portugal and its airlines currently operate 353 weekly flights to six Portuguese destinations, which represents a 75% increase compared with 2019.
More than 500 qualified professionals work today for the various companies in the group in the country. With the new Lufthansa Technik plant in Santa Maria da Feira, near Oporto, whose construction began in June, direct employment is expected to exceed 1,000 positions by 2030.