Air France-KLM and Lufthansa file final bids for 44.9% of TAP Air Portugal
Victoria Shinder2 min readAir France-KLM and Lufthansa submitted their final bids on 30 September for a 44.9% stake in TAP Air Portugal, closing the bidding phase of the airline's privatisation, Euronews reports. The announcement came from Parpública, the state body that manages Portugal's shareholdings.
The final offers are expected to improve on the binding bids both groups submitted on 29 July. Parpública will now prepare a report on the improvements and the overall merit of each bid for the ministers responsible for finance and air transport. Infrastructure Minister Miguel Pinto Luz had said earlier in the week that the government would then have 15 days to take a position. The bids will be judged on planned investment, fleet development, commitments on maintenance and sustainable fuels, and respect for labour obligations.
Both bidders made their case in statements. Air France-KLM said it submitted a final proposal for a shareholding of up to 49.9%, and chief executive Benjamin Smith said the revised offer would make Lisbon the group's exclusive hub in southern Europe, with a stated intention to create jobs across the country. Lufthansa said its record in developing network airlines makes it the best partner to support TAP's growth and its role as Portugal's flag carrier.
The process still has several steps. The procedure allowed for an optional negotiation phase before an investor is chosen, the final decision needs approval from the Council of Ministers, and the deal requires clearance from European competition authorities. A further 5% of TAP's shares is reserved for employees, and any part they do not take up may be acquired by the chosen investor.
Why it matters
Whichever group wins gains a minority stake in a hub with strong links to Brazil and Africa. The difference between the 44.9% on offer and Air France-KLM's "up to 49.9%" depends on the employee tranche, and competition clearance in Brussels will decide how much of either offer survives.