Lufthansa's €1.2 Billion TAP Bid May Yield €450 Million Annual Savings, but Benefits Face Delays

Lufthansa's winning €1.2 billion bid for up to 49.9% of TAP Air Portugal could deliver roughly €450 million in annual savings and added revenue, but a Gimme Credit report published Tuesday says the gains will be slow to materialize. Portugal's government last week selected Lufthansa's offer over a rival bid from Air France-KLM. Lufthansa will pay €1.025 billion for 44.9%, rising to as much as €1.2 billion for 49.9% through employee shares and a ticking fee. The state retains 50.1% and a board majority, while Lufthansa names the CEO. Completion is penciled in for 2028, pending final negotiations, cabinet approval and European Commission clearance. Lufthansa's bid valued TAP about 16% above Air France-KLM's and was all cash. The prize is TAP's network to Brazil and Latin America, where it holds 24% of Europe-Brazil seat capacity; combined with Lufthansa the share would reach 36%. TAP's all-Airbus fleet adds scale economies. Gimme Credit sees joint-venture revenue unlikely before 2030 and kept a "sell" on Lufthansa bonds.