Air France-KLM and Lufthansa submitted their final bids on Wednesday to buy a 44.9% stake in TAP, closing the bidding phase and leaving the decision to the government.
Air France-KLM and Lufthansa have already submitted their final bids for the privatisation of 44.9% of TAP’s share capital, which are expected to include improvements on the offers submitted on 29 July.
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The announcement was made on Wednesday by Parpública. In a statement, the state shareholding manager said it will now draw up a descriptive report on the improvements put forward by the two candidates, "assessing their final overall merit and forwarding it to the members of the Government responsible for the finance and air transport portfolios".
Wednesday was the deadline set by the Government for the airlines competing for TAP. On Monday, the Minister for Infrastructure and Housing, Miguel Pinto Luz, had said that the final bids from the two contenders would be submitted by Wednesday and that the Government would then have 15 days to take a position on the process.
The final bids set out the financial and strategic terms for taking a stake in the Portuguese airline. They will be assessed on the planned investment, fleet development, commitments in areas such as maintenance and sustainable fuels, and respect for labour obligations.
In its statement, Air France-KLM says it "reiterated today its strong and continued interest in TAP Air Portugal by submitting its final proposal for a shareholding of up to 49.9% in the airline".
Quoted in the document, Benjamin Smith, the group’s CEO, states that "interest in TAP is stronger than ever". "Over the past four weeks, our team and our advisers have worked diligently to strengthen our bid, and I am convinced that this revised proposal is the best way forward for TAP, for its management, its employees and its customers, as well as for Portugal," he argues.
According to the Air France-KLM chief executive, the proposal presented "is an ambitious long-term strategic plan" which, in his view, will "better position TAP for the future and safeguard Portugal’s connectivity and sovereignty".
"My personal conviction and our guiding principle remain unchanged: if Air France-KLM is chosen, TAP and Portugal will be the winners in the global aviation market," he maintains, adding that the group’s offer "has been built around a stronger Portuguese flag carrier, with Lisbon as the Air France-KLM Group’s exclusive hub in Southern Europe, offering greater connectivity and a clear intention to create jobs and value across the country".
Lufthansa, in a written statement, stressed that its proposal reflects "the conviction" that, based on its "proven track record of successfully developing network airlines, the Lufthansa Group is the best partner to support TAP’s future growth, strengthen its competitiveness and continue to develop its role as Portugal’s flag carrier".
The process has from the outset envisaged an optional negotiating phase to improve the bids before the investor is chosen. The final decision will also involve a series of formal steps, including approval by the Council of Ministers and securing the green light from the European competition authorities.
The sale of TAP also includes 5% of the shares reserved for employees, with any unsubscribed stake also available to be acquired by the selected investor.
