Lufthansa Group has signed an agreement with the Portuguese government to acquire an initial 44.9% stake in TAP Air Portugal for €1.025 billion, with plans to develop Lisbon into its seventh hub.
The agreement, signed at Lisbon’s Humberto Delgado Airport, advances TAP’s privatisation process. The acquisition remains subject to regulatory approvals, including clearance from the European Commission.
Lufthansa intends to finance the investment entirely from available liquidity.
Stake could increase to 49.9%
Under the agreement, Lufthansa Group could raise its holding to as much as 49.9% through the possible acquisition of shares initially offered to TAP employees. Including a contractual “ticking fee”, the total purchase price could reach €1.2 billion.
The group also expressed support for TAP’s eventual full privatisation. It estimates potential synergies of up to €450 million, most of which it says could be achieved through a minority holding.
According to Lufthansa, acquiring a majority stake would create further opportunities to accelerate TAP’s growth and strengthen its position within the wider airline group.
Brazil and Latin America central to growth plans
The proposed investment would significantly strengthen Lufthansa Group’s presence on routes between Europe and Latin America, particularly Brazil.
The group puts its current share of that market at approximately 9%. Together with TAP, it calculates a combined share of around 20%, bringing it closer to its principal competitors.
Expansion plans focus on TAP’s connections between Portugal and Brazil, Portuguese-speaking Africa and North America. Alongside Lisbon, the strategy includes Porto, the Azores, Madeira and the Algarve.
“Our networks complement each other ideally and open up new growth opportunities for us in Portugal and in particular in South America and Brazil,” said Carsten Spohr, Chairman of the Executive Board and CEO of Deutsche Lufthansa AG.
“Together with TAP’s employees, we want to continue the airline’s success story, preserve its Portuguese identity and develop Lisbon into a Lufthansa Group hub.”
A larger footprint in Portugal
Lufthansa Group’s airlines currently operate 353 weekly flights to six Portuguese destinations, an increase of 75% compared with 2019.
The group employs more than 500 skilled professionals in Portugal. With the development of a Lufthansa Technik facility in Santa Maria da Feira, near Porto, it expects its workforce in the country to exceed 1,000 direct jobs by 2030.
Construction of the maintenance facility began in June, adding to the group’s existing aviation business in Portugal.
Completion of the TAP investment will follow once all required regulatory approvals have been obtained.
