Colombian President Juan Manuel Santos visited Portugal along with top business executives Tuesday to discuss the possibility of Colombia’s largest airline acquiring Portugal’s largest airline.
Rumors that Avianca, the oldest carrier in South America, will purchase TAP gained steam as President Santos arrived in Lisbon to discuss several issues, including large-scale Colombian investment in the debt-ridden European nation.
Portugal’s precarious financial state has mandated they take drastic measures to pay back IMF bailout money.
According to Stefan Kick, a research analyst at Silvia Quandt, a German brokerage and investment firm, Portugal is seeking “reference shareholders” for TAP indicating that it wants to sell off a majority stake.
Europe’s three biggest carriers showed no interest in the TAP auction, thus boosting prospects that Avianca would takeover the Iberian company. The proposed acquisition could exceed $650 million and would make TAP Avianca’s European hub.
For the last decade, the trade relationship between Colombia and Portugal has been heavily one-sided. From 2001 to 2011, Portuguese investment in Colombia totalled $16.4 million, while in 2011 alone, Colombian exports to Portugal reached $312 million.
President Santos’ visit marks the first time a Colombian president has travelled to Portugal on official business.