Portugal has formally moved the privatization of flag carrier TAP a step closer, asking Air France-KLM and Lufthansa to submit binding offers for a minority share in the airline after the two groups supplied closely matched initial proposals.
The government said it will dispatch formal invitations to both airline groups by the end of April. Interested parties that receive invitations will have until the close of July to present binding bids, with the transaction planned to reach completion by early September.
The privatization process was restarted last July with a specific structure in mind: the state is seeking to sell 44.9% of TAP to a strategic airline partner in order to bolster the carrier's global network and competitive position. A further 5% of the carrier's equity has been set aside for TAP employees.
Earlier this month Air France-KLM and Lufthansa each submitted non-binding proposals. Those preliminary offers reportedly included proposed prices for the 44.9% stake, together with industrial and strategic plans and estimates of potential synergies. The Portuguese government has not released the detailed contents of either proposal.
Infrastructure Minister Miguel Pinto Luz characterized the two initial offers as "largely equivalent and very ambitious" across strategic, industrial and financial dimensions, adding that this left officials comfortable with the company's valuation. "With proposals that close, meeting all dimensions, the financial valuation of TAP may naturally end up playing a decisive role. We will wait for the binding offers," he said at a news conference.
A principal asset underpinning interest in TAP is its slot position at Lisbon's hub, which provides lucrative connections to Brazil, Portuguese-speaking African countries and the United States. Those airport slots are cited by officials as a core element of the carrier's commercial appeal.
Separately, Pinto Luz said the government was monitoring disruptions linked to the crisis in the Middle East, noting the closure of the Strait of Hormuz had raised concerns about jet fuel supply for European carriers and contributed to some flight cancellations. He expressed the belief that the situation would be resolved "sooner rather than later."
Process timeline
- Formal invitations to be sent by end-April.
- Binding offers due by end-July.
- Privatization expected to conclude by early September.