The Foreign Investment Council of the Ministry of Economy, Trade and Business has rejected the public takeover bid (OPA) presented by the Hungarian group Magyar Vagon to acquire 100% of Talgo, citing national security reasons, as reported by the Basque Courier.
The rejection of the operation is not a surprise. In the spring, the Minister of Transport and Sustainable Mobility, Óscar Puente, already predicted that the government would do “everything possible” to stop this operation. He also hoped that a competing offer would arrive in which Spanish investors would participate.
45% of the capital of the Hungarian consortium that wanted to buy Talgo, and which forced it to launch a public takeover bid, is controlled by Corvinus, a Hungarian state fund, a country now governed by Viktor Orbán, who has recently come into conflict with the European Union itself for its unilateral approach towards Russia and its opposition to accepting refugee quotas. In fact, the director of Magyar Vagon, András Tombor, was an advisor to the Hungarian government that Orbán also led as prime minister between 1998 and 2002.
The Hungarian company formalized its offer to acquire Talgo for 619 million euros with the National Securities Market Commission (CNMV) in April. Following the government’s decision, the stock market supervisory authority decided to suspend the railway manufacturer’s listing.
In this sense, the Foreign Investment Board put forward reasons of national security, in line with the message already sent by Puente, stating that this takeover bid posed a strategic problem because Talgo has technology that affects the military mobility of other European countries such as the Baltic countries, according to Europa Press.
Furthermore, the government doubted whether the Magyar Vagon factories in Hungary had sufficient capacity to solve all of Talgo’s production problems.
The Government’s authorization was an essential condition to continue with the operation, in application of the anti-takeover shield that it approved due to COVID, as well as by Law 19/2003 on the legal regime of capital movements and economic transactions with the abroad.
In addition, Talgo has another proposal on the table, a merger but without a takeover bid, which is being pursued by the Czech group Skoda Transportation and which the Spanish company rejected at the end of July because it considered that it was not reaching “the right time”, in reference to the acquisition of the Hungarian company.
