IAG Expected to Drop Bid for Portugal's TAP, Reports Bloomberg

• Portugal relaunched TAP's privatization last year, seeking to sell a 49.9% stake, with non-binding offers due April 2
• IAG announced interest in a minority stake, competing against Air France-KLM and Lufthansa for the Portuguese flag carrier
• IAG may submit a non-binding offer by deadline but not pursue an actual transaction, leaving the privatization outcome uncertain

Summary: IAG Expected to Drop TAP Acquisition Bid

International Airlines Group (IAG), parent company of British Airways, is likely to abandon its pursuit of Portugal's national carrier TAP, according to a Bloomberg News report citing sources familiar with the matter.

Key Developments:

IAG had previously expressed interest in acquiring a minority stake in TAP, joining competitors Air France-KLM and Lufthansa in the privatization process. Portugal relaunched the long-delayed sale of a 49.9% stake in TAP last year, with the Portuguese government inviting all three airline groups to submit non-binding offers in early January.

Timeline and Status:

The April 2 deadline for non-binding offers is approaching. According to the report, no final decision has been made, and IAG could still submit a non-binding offer by the deadline without pursuing an actual deal. Neither IAG nor the Portuguese government has commented on the report.

Market Implications:

IAG's potential withdrawal narrows the field of bidders for TAP's privatization, leaving Air France-KLM and Lufthansa as the primary contenders. This development may impact the competitive dynamics of European aviation consolidation and could affect the valuation and terms of TAP's eventual sale.

The withdrawal, if confirmed, would represent a strategic shift for IAG, which has been evaluating expansion opportunities in the European market. For Portugal, fewer bidders could complicate the privatization process and potentially reduce competitive tension in pricing negotiations.

The airline industry continues to see consolidation interest as carriers seek scale advantages and network expansion opportunities in the post-pandemic recovery period.