(April 23): Portugal has invited Air France-KLM and Deutsche Lufthansa AG to submit binding bids for a minority stake in TAP SA, setting up a contest for one of Europe’s last remaining state-owned airlines.
The government backed a proposal by state holding company Parpública, which manages its stake in TAP, to advance both initial offers to the next stage after they met “all the criteria,” Infrastructure Minister Miguel Pinto Luz said at a press conference in Lisbon on Thursday, noting the requirement to maintain the hub in Portugal.
“The two proposals are very similar in terms of their strategic dimension, the industrial plan and the financial offer,” Pinto Luz said, declining to comment on the valuation outlined by either airline group. The government expects to reach a final decision in August or early September, he added.
Portugal plans to sell as much as 49.9% of TAP, with a 5% stake first reserved for employees. The two airline groups will now conduct due diligence and are expected to submit binding offers within about three months, in line with the government’s previously announced privatisation timeline.
People familiar with the matter had said earlier this week that officials were likely to move Air France-KLM and Lufthansa to the next stage.
TAP is valued for its network linking Europe with Brazil, North America and parts of Africa, making it an attractive target for larger airline groups looking to expand their long-haul operations.
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At Thursday’s press conference, Finance Minister Joaquim Miranda Sarmento said the war in Iran has created uncertainty in the aviation sector, but he does not expect it to affect TAP’s valuation. He also reiterated that TAP needs to be part of a larger European airline group to remain sustainable.
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