The choice was approved this Wednesday by the Council of Ministers, following which the Prime Minister announced the decision, CNN Portugal reports.

“Having evaluated the proposals, the Government’s decision rests on the Lufthansa group, whose financial offer is 16 percent higher than the competing offer and has a lower degree of uncertainty,” declared the Prime Minister.

According to Luís Montenegro, “this is the best choice for the future of the company and the one that best protects the national interest.”

Air France-KLM had been competing in the final phase of the privatisation process.

Lufthansa’s stake in TAP

The proposal foresees the sale of 44.9 percent of TAP to Lufthansa, plus an additional 5 percent to be sold to the company’s employees, CNN Portugal reports. If the employees do not acquire this stake, Lufthansa may acquire it, raising its shareholding to 49.9 percent of TAP. This means Lufthansa could pay 1.2 billion euros for almost half of the airline, while the Portuguese State would retain 50.1 percent.

Investment plans

Lufthansa has committed to increasing TAP’s fleet from the current 106 aircraft to 117 by 2035 and to 130 aircraft after the completion of the new Lisbon airport, including the transfer of eight A350-900s from Lufthansa to TAP after 2030.

Another investment has already been announced, with Lufthansa planning to invest around 300 million euros in Santa Maria da Feira, creating 700 jobs.

Lufthansa remains committed to honouring existing agreements with TAP employees and preserving the airline’s brand and Lisbon hub.

Deal expected to be finalised in 2028

The deal is expected to be signed by the end of this year, after which it will require regulatory approval, particularly from the European competition authority. Based on previous transactions, the sale is expected to be finalised in June 2028.

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