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Portugal asks Air France, KLM and Lufthansa to improve their offers for TAP sale

Portugal's government asked rivals Lufthansa and Air 'France-KLM to submit better offers for a'minority stake' in the 'flag carrier TAP', starting a final round of negotiations, after judging that both groups' first bids were too similar to choose one.

In July, both European airline groups made binding but undisclosed offers to purchase a 44.9% stake in TAP. They also offered to become TAP's strategic partner. The?government received the assessment of the offers from Parpublica, the state-owned holding company.

Leitao Amaro stated that the two binding offers "differeced in their content but were rated as being broadly similar overall".

He told reporters that after a cabinet session, "we have decided to start a final round?of negotiations lasting a few weeks. During?this time we expect bidders to increase their offers."

Portugal has revived its long-delayed TAP privatisation in July 2025. It is looking for a strategic investor who can expand the airline's reach internationally and increase its competitiveness.

The winning bidder will have the option of acquiring any shares that are not claimed by employees.

TAP's biggest attraction is its?valued?slots connecting its Lisbon hub to Brazil, Portuguese-speaking African nations and the United States. These routes are important for Portugal's diaspora and tourism, as well as investment.

The government has asked that the future strategic partner of TAP support growth in Portugal's airport system, strengthening operations and connectivity, not only in Lisbon, but also in Porto and Faro and in the Azores and Madeira.

The government can sell the remaining 50% stake in the company to the strategic investor.

(source: Reuters)