Lufthansa Group and the Portuguese government have signed an agreement for the acquisition of an initial 44.9% stake in TAP Air Portugal for €1.025 billion. The agreement was signed at Lisbon’s Humberto Delgado Airport, while completion of the transaction remains subject to approval by the relevant regulatory authorities, particularly the European Commission.

By acquiring a stake in the Portuguese carrier, Lufthansa Group intends to significantly strengthen its presence in the market for flights between Europe and Latin America. According to figures released by the group, its current market share in this segment is approximately 9%, while its combined share with TAP would reach around 20%. Lufthansa estimates that this would bring it closer to its main competitors.

Lisbon is set to become Lufthansa Group’s seventh hub, while TAP’s Portuguese identity would be preserved. Development plans primarily focus on expanding connections between Portugal and Brazil, Portuguese-speaking African countries, and North America. Alongside the capital, Porto, the Azores, Madeira and the Algarve are also included in the growth strategy.

Lufthansa Group will finance the agreed acquisition entirely from available liquidity. Its stake could subsequently increase to 49.9% through the possible purchase of shares initially offered to employees. Including a fee linked to the time elapsed before completion of the transaction, known as a “ticking fee”, the total purchase price could reach €1.2 billion.

Although the agreement provides for a minority stake, Lufthansa Group has clearly expressed its interest in TAP’s full privatisation. It says that minority ownership would already enable it to realise most of the estimated synergies of up to €450 million, while a majority stake would create further opportunities to accelerate growth and integrate TAP more closely with the group’s other airlines. The announcement does not specify the period covered by the synergy estimate.

Lufthansa Group CEO Carsten Spohr emphasised that the two carriers’ networks complement each other well, particularly in Portugal, South America and Brazil. He described the signing as an important step in the group’s further development, underpinned by a long-term commitment to the Portuguese market and cooperation with TAP’s employees.

Lufthansa has been present in Portugal for more than 70 years, and the group’s airlines currently offer 353 weekly flights to six Portuguese destinations, an increase of 75% compared with 2019. Group companies employ more than 500 skilled professionals in the country. With the new Lufthansa Technik facility in Santa Maria da Feira near Porto, where construction began in June, the number of direct jobs is expected to exceed 1,000 by 2030.

The signed agreement marks an important step in TAP’s privatisation, but it does not mean that the acquisition has been completed. The transfer of ownership will take place only after all necessary regulatory approvals have been obtained, and the announcement does not provide an expected completion date.