LISBON, Nov. 3 (Xinhua) -- The Portuguese government and German airline group Lufthansa signed an agreement Tuesday for the acquisition of up to 49.9 percent of Portugal's national carrier TAP Air Portugal, marking a key step in the airline's privatization process.
The signing ceremony was held at TAP's Hangar 4 facility near Lisbon's Humberto Delgado Airport, attended by Portuguese Prime Minister Luis Montenegro and Lufthansa Group CEO Carsten Spohr, along with senior government and aviation officials.
"This is a very important milestone for TAP and Lufthansa," Spohr said, describing the agreement as a significant step toward their shared future and the development of the Lufthansa Group.
The Portuguese government selected Lufthansa in October as the preferred bidder for the stake sale, with 5 percent of the shares reserved preferentially for TAP employees.
The German group's offer values the transaction at 1.201 billion euros (1.345 billion U.S. dollars) for the Portuguese state, exceeding the competing bid from Air France-KLM by 163 million euros (183 million U.S. dollars).
The agreement formalizes the regulatory and financial conditions of the share sale, the shareholders' agreement governing the relations between the Portuguese state and Lufthansa, and the investment commitments made by the German group.
Under the proposed investment plan, TAP's fleet, which currently comprises around 100 aircraft, is expected to expand to 117 planes by 2035 and 130 after 2035, in connection with the opening of a new airport in Lisbon.
Lufthansa also plans to invest in a TravelTech Innovation and Startup Hub in Aveiro, a corporate services center and the establishment of a military aviation school in Tancos.
Following the signing, the transaction will be notified to the European Commission and could be completed when getting the approval of the commission.
