Lufthansa, Air France-KLM vie for Portugal's TAP stake, IAG bows out

* Lufthansa and Air-France submitted non-binding offers

* Portugal moves ahead with ​long-delayed TAP privatisation

* IAG ⁠has also expressed initial interest

* Lisbon hub slots to ​Brazil, Africa and US are key assets (Changes headline, recasts lead, adds IAG comment in fourth paragraph)

BERLIN/LISBON, April ​2 (Reuters) - ‌Air France-KLM and Germany's Lufthansa were the only airlines to submit non-binding bids for a minority stake in Portugal's flag carrier TAP ⁠on Thursday, while British Airways owner IAG opted out despite initial ⁠interest.

Portugal re-launched the long-delayed privatisation of TAP in ​July, aiming to sell a 44.9% stake to a strategic airline partner able to expand the carrier's global reach and competitiveness, with a further 5% earmarked for TAP employees.

A Lufthansa spokesperson told Reuters the airline had submitted an ​offer, following an ‌earlier move by Franco-Dutch group Air France-KLM.

IAG, which had also shown initial interest in TAP, said in a statement that after "careful consideration" it had decided not to proceed with the acquisition of the minority stake as it prioritises growth opportunities within the existing group.

OFFERS MUST INCLUDE STRATEGIC PLAN

The non-binding offers, which had to be submitted ​by 1600 GMT on Thursday, had to include a proposed price for the TAP stake, along with industrial and strategic ‌plans and expected benefits.

Neither Air France-KLM nor Lufthansa disclosed the price offered, and the German airline issued no public statement.

"Our ambition is to strengthen operations in ‌Lisbon while developing connectivity elsewhere in Portugal, including Porto," Air France-KLM CEO Benjamin Smith said in a statement earlier.

TAP's key appeal lies in its prime and lucrative slots connecting its Lisbon hub with Brazil, Portuguese-speaking African countries and the ​United States, routes the Portuguese government intends to preserve and expand.

TAP A 'NATURAL FIT' FOR AIR FRANCE-KLM

Smith said that "TAP is a natural ‌fit" within Air France-KLM's multi-hub strategy, with Lisbon becoming its sole southern European hub, linking the Americas and Africa.

In November, Lufthansa CEO Carsten Spohr said his group would be TAP's "best partner," and a tie-up would bolster Lisbon's role as ⁠an Atlantic hub ⁠linking the Americas and Africa.

Under the privatisation decree, the government may later sell ‌its remaining 50.1% to the buyer of the minority stake now on offer.

The next step is for the state holding company Parpublica, which ​handles the bidding, to ​prepare within 30 days a report on each proposal's merits for the government. ‌It will then select the most suitable non-binding offers and invite those bidders to submit binding proposals within 90 days.

The privatisation is expected to conclude in the second half of 2026. (Reporting by Sergio Goncalves, Klaus Lauer and Gianluca Lo Nostro; Editing by Milla Nissi-Prussak, Tomasz Janowski, Bernadette Baum and Jane Merriman)

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