Lufthansa signs deal for 44.9pc stake in TAP Air Portugal

Dhaka: Lufthansa Group has signed an agreement with the Portuguese government to acquire a 44.9 percent stake in TAP Air Portugal for EUR 1.025 billion (about USD 1.2 billion), marking a major step in the German group's expansion across Europe and Latin America.

The agreement was signed at Lisbon Airport on November 3, following Portugal's selection of Lufthansa over rival bidder Air France-KLM. The transaction remains subject to regulatory approval, with completion expected in 2028.

Lufthansa will finance the acquisition using its existing liquidity. The group could potentially increase its holding to 49.9 percent by acquiring additional shares initially reserved for TAP employees, raising the total investment to around EUR 1.2 billion.

Lufthansa CEO Carsten Spohr said the two airlines' networks would complement each other, particularly in Brazil and other South American markets. The deal could establish Lisbon as the group's seventh hub and strengthen connections to Portuguese-speaking Africa and North America.

The German group expects the partnership to generate up to EUR 450 million in synergies through coordinated operations and shared resources.

Portugal will initially retain majority ownership of TAP. Lufthansa has pledged to preserve the airline's Portuguese identity while supporting fleet expansion and investment in the country.

The agreement follows Lufthansa's acquisition of a stake in Italy's ITA Airways and reflects its broader strategy of strengthening its position through partnerships and investments in European carriers.