Madrid prohibits the sale of Talgo trains to Hungary
The Spanish administration has turned down a sale of train producer Talgo to Hungary. The administration utilized its power to veto a 619 million euro bid from the semi-governmental union Ganz-MaVag for Talgo, expressing fears over national security and public order, as reported by Madrid's Ministry of Economy. The consortium, which includes the Hungarian state fund Corvinus and Hungarian train manufacturer MaVag, was unavailable for comment.
According to news sources, the administration is worried about the political association between Hungary's Prime Minister, Viktor Orban, and Russia. With Talgo having access to confidential data regarding Spain's railway system, which in turn impacts national security, the authorities are exercising caution. The securities authority, CNMV, momentarily suspended trading in Talgo shares.
Despite having a backlog of orders valued at over 4 billion euros, Talgo is grappling with capacity constraints. Last year, German rail service Deutsche Bahn granted Talgo its largest-ever order: the Spanish company will deliver an additional 56 "ICE L" trains for long-distance travel, valued at 1.4 billion euros.
Ganz-Mavag submitted its formal acquisition proposal for Talgo in March. Speculation surrounding alternatives had been rife in Spanish media since then, with the Czech competitor Skoda Transportation initially expressing interest in merging with Talgo. However, Skoda clarified in late July that it had no plans to submit a takeover offer.
Trilantic, a financial investor, controls about 40% of Talgo. Early March reports suggested that Trilantic was contemplating selling its shares to Swiss rival Stadler Rail, which manufactures locomotives in Valencia. Some reports later claimed that the Spanish government was interested in purchasing Trilantic's stake. Skoda Transportation, however, is under the ownership of the PPF Group, which is headed by the widow of late billionaire Petr Kellner. While Skoda shares the same name root with the car manufacturer Skoda, which falls under Volkswagen's group, they are separate entities.
The veto of Ganz-MaVag's bid for Talgo by the Spanish administration sparked discussions about potential ‘acquisitions and mergers’ in the railway industry. Considering Talgo's involvement in substantial national security projects, the administration is vigilantly scrutinizing any potential deals.
