Lufthansa Signs Agreement to Buy 44.9% of TAP for €1.025 Billion
Key Facts
Lufthansa Group and the Portuguese government signed an agreement on November 3 for the purchase of an initial 44.9% stake in TAP Air Portugal for €1.025 billion, a deal still awaiting approvals from the relevant authorities, led by the European Commission. Lufthansa said the investment would be fully financed from available liquidity. The agreement does not mean the stake will transfer to the group immediately, as completion remains conditional on securing regulatory approvals. Lufthansa’s ownership could rise to 49.9% if it later buys shares initially offered to TAP employees. Including a fee linked to the completion date, the total purchase price could reach €1.2 billion.
The consideration structure distinguishes the fixed price for the initial stake from the deal’s potential upper limit. The agreed amount of €1.025 billion is for a 44.9% stake, while reaching 49.9% depends on buying employee shares offered to them in an initial phase. The €1.2 billion ceiling is not the base price for the stake, but a potential total that takes into account what is known as a delay fee linked to the completion date. Lufthansa said most of the synergies it estimates at up to €450 million could be achieved even with a minority stake. In the group’s assessment, this gives the investment scope to deliver much of the operational gains before any potential increase in ownership.
Lufthansa is placing the expansion of TAP’s network at the center of its growth plan, focusing on connections between Portugal, Brazil, Portuguese-speaking Africa and North America. The group’s chief executive said the two companies’ networks “complement each other perfectly” and create growth opportunities in Portugal, particularly in South America and Brazil. He added that the group wants to preserve the airline’s Portuguese identity in partnership with TAP employees and develop Lisbon into a group hub. Lufthansa says overlap between the networks is limited and that combining them would support the expansion of transatlantic air links. The growth plan also includes Porto, the Azores, Madeira and the Algarve, while the group aims for Lisbon to become its seventh hub in the future.
In the air travel market between Europe and Latin America, Lufthansa estimates its group’s current share at around 9% and says combining its network with TAP’s would raise the calculated share to around 20%. These figures reflect the broader presence that could result from adding the Portuguese airline’s destinations to the group’s network, while the deal itself remains subject to approvals. In its assessment of privatization bids in October, the Portuguese government said Lufthansa’s offer to buy up to 49.9% was up to 16% higher than Air France-KLM’s offer. The signed agreement thus comes amid competition for a stake in the national carrier, following the bid evaluation phase. TAP carried 16.7 million passengers in 2025, according to the Associated Press, and its fleet comprised more than 90 aircraft serving more than 90 destinations.
The deal coincides with Lufthansa’s release of its results for the first nine months of the year on November 3. From January to September 2026, the group’s operating expenses rose 8% to €33.018 billion, with the company attributing the increase mainly to higher fuel expenses. TAP, meanwhile, reported a net profit of €4.1 million in 2025, according to the Associated Press. These figures provide financial context for the deal: Lufthansa is funding its investment from available liquidity, while it estimates that combining the networks could generate synergies of up to €450 million. The figures cited did not provide an independent estimate of the deal’s contribution to the group’s earnings or the timing of those synergies.
The next step is to complete reviews by the relevant authorities, including the European Commission, before the initial stake transfers to Lufthansa. Any subsequent acquisition of a majority of TAP’s share capital would follow a separate process, according to the Portuguese government. Lufthansa’s offer assumed that this potential second phase would be completed by July 2028, a hypothetical date tied to a later process that does not change the pending approval condition for the current agreement. Until then, the announced plans focus on developing TAP’s network and strengthening Portugal’s connections to the markets identified by the group. Lufthansa says developing Lisbon as a hub and preserving TAP’s Portuguese identity are part of its vision for the partnership.