Ganz-Mavag applies for the acquisition of Talgo
14.03.2024
The Spanish government has intervened in Talgo’s negotiations, expressing concern about the ownership of Ganz-Mavag Europe, this is reported by the railway transport news portal Railway Supply citing Railway Technology.
The Spanish rolling stock manufacturer Talgo confirmed that the Hungarian holding company Ganz-Mavag Europe has approached them with an offer to acquire 100% of its shares.
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According to Talgo’s CEO Gonzalo Urquijo Fernández de Araoz, the company and its parent company Pegaso Transportation International “have expressed… the intention to accept the offer.”
However, the Spanish government intervened, expressing concern about the ownership of Ganz-Mavag Europe and its alleged ties to Russia.
Transport Minister Oscar Puente stated that he intends to do “everything possible” to stop the acquisition due to concerns.
The acquisition requires approval from the Madrid government due to its strategic importance to the Spanish state.
Issues arise from the owners of the Hungarian firm. Although 55% of Ganz-Mavag is owned by the Ganz-Mavag holding of investor András Tombor, the remaining 45% is owned by Corvinus, a Hungarian state investment company.
In a bidding announcement, Ganz-Mavag explained that the parent company “is fully owned by the Hungarian state, whose property rights are exercised by the Ministry of National Economy of Hungary.”
According to Spanish media reports, the government is concerned that this connection to Viktor Orbán’s government in Budapest may imply support from Russian sources in violation of European sanctions against Moscow.
The Corvinus State Wealth Fund invested in the Russian International Investment Bank until 2023 when Orbán and Hungary yielded to pressure from the EU and distanced themselves from Russian interests.
Spanish legal documents also link the Hungarian company to MOL, a Hungarian oil and gas public limited company, through at least two parent/holding companies via Solva Industrial.
“The Hungarian state has no direct or indirect involvement in GanzMavag Holding Kft or in Solva II Magántőkealap,” states the financial report of Ganz-Mavag Europe.
The offer from Ganz-Mavag concerns 100% of Talgo’s existing 123,860,214 shares at a price of 5 euros (5.45 US dollars) per share.
The offer is calculated for a cash deal totaling 619,301,070 euros (675,565,674.99 US dollars).
Ganz-Mavag stated that this price represents a 14.42% premium to Talgo’s shares at the closing of markets on February 7, 2024—the date when Spanish trading authorities suspended trading in Talgo shares due to press reports of a pending acquisition offer.
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In response, Talgo’s board of directors provided an official but preliminary response: “The company’s board of directors unanimously confirmed that the offer is friendly in nature and the proposed consideration is attractive to the company’s shareholders, expressing a preliminary positive opinion on this price.”
In a statement from March 7, it was added that its parent company is also considering the possibility of accepting the offer.
“The directors representing Pegaso Transportation International SCA have expressed to the Board of Directors of Pegaso Transportation International SCA their intention to accept the Offer with all their shares in the company,” the statement said.
If accepted by Talgo’s board of directors, the financial agreement will not be the final obstacle for the Hungarian firm.
Being a fully foreign enterprise, Ganz-Mavag must obtain approval for foreign direct investments from the highest echelons of the Spanish government.
“The offer is subject to preliminary approval by the Council of Ministers of the Government of Spain,” the company acknowledged in its proposal to market authorities.
Documents must be submitted to the General Directorate of International Trade and Investments of the Ministry of Economy of Spain, which then convenes the Foreign Investment Council and reports to the Council of Ministers.
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