Germany's Lufthansa Beats Air France-KLM to Take $1.3 Billion Stake in Portugal's Flag Carrier

Dow Jones10-14 22:39

The Portuguese government said Deutsche Lufthansa had been chosen to buy a near 50% stake in airline TAP valued at around $1.34 billion, beating its rival Air France-KLM.

Portuguese Prime Minister Luis Montenegro said the government had chosen the German group to take the 49.9% stake, the first phase of the privatization of the flag carrier, for proceeds of 1.20 billion euros ($1.34 billion). The state will remain the largest shareholder with a 50.1% stake.

"This is the best thing for the future of the company, and is the best way to protect the national interest," Montenegro said.

Lufthansa declined to comment immediately on the decision. Air France-KLM didn't immediately respond to a request for comment.

The decision brings to a close a contest between Lufthansa and Franco-Dutch rival Air France-KLM for the acquisition of the stake. The two companies in April said they submitted nonbinding offers for TAP, after the Portuguese government said last summer that it planned to sell a 49.9% stake in the carrier.

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