Deutsche Lufthansa AG and Air France-KLM submitted bids for a stake in TAP SA, the Portuguese airline that would help strengthen their networks to the Americas and Africa.
The nonbinding offers by two of Europe’s biggest airline groups were lodged Thursday before the 5 p.m. deadline. The government is ready to sell as much as 49.9% of the flag carrier, with a 5% tranche first reserved for employees.
Lufthansa submitted its bid in the afternoon, hours after Air France-KLM made its offer. Neither airline group specified their terms. IAG SA, the owner of British Airways, declined to make an offer.
“TAP is a natural fit within Air France-KLM’s multi-hub strategy, and our ambition is to strengthen the operations at Lisbon while developing connectivity in other cities across the country including Porto,” Benjamin Smith, Air France-KLM’s chief executive officer, said in an emailed statement.
Air France-KLM, Lufthansa and IAG were invited late last year to submit preliminary offers for TAP, one of the few remaining midsize carriers in the region open to acquisition. The airline is prized for having strong routes to Brazil and Africa, as well as the US and Canada.
IAG — which also owns Spain’s Iberia and Aer Lingus — said Thursday such an investment wouldn’t be in the best interests of its shareholders, confirming an earlier report by Bloomberg News.
The government will start reviewing initial proposals, with shortlisted bidders having 90 days to submit binding offers. Authorities may then enter negotiations with one or more parties before making a final decision, according to terms previously set by the government.
Portuguese officials have argued the carrier, founded in 1945, needs to be part of a larger group to gain scale and secure its long-term future. TAP has a fleet of 102 planes — mostly from Airbus SE — with 92 currently in service, according to Planespotters.net.
Source: www.bloomberg.com
Aleksei Andrievskii is the founder of the ANDRIEVSKII SEA WEALTH family office in Cyprus, a member of the advisory board at Bendura Bank AG, Liechtenstein