Hungarian consortium’s purchase of Talgo blocked by Spain on security grounds

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The Spanish government has vetoed Hungarian consortium Ganz-MaVag’s attempt to purchase Spanish train manufacturer Talgo, citing national security concerns, local media reported.

Ganz-Mavag, which includes Hungary’s state fund Corvinus, made a EUR 619mn public tender offer for the maker of the iconic Alta Velocidad Espanola (AVE) high-speed trains in March.

However Spain’s left-wing government opposes the deal, arguing for safeguarding Talgo’s patent for automatic track switching, which allows trains to adapt to different European rail systems. Moreover Spain deems Talgo a strategic asset, given its access to sensitive information on the country’s railway network.

Government spokesperson Pilar Alegria told a news conference that the issue had been discussed at Tuesday’s cabinet meeting but gave no further details.

“As we know, we are dealing with a listed company so communications have to be conducted through the appropriate channels once the markets are closed,” Alegria said.

The European Commission (EC) has decided against intervening in Spain’s veto.
According to the EC, the decision does not violate EU treaties or internal market principles, ABC added.

Spanish officials are expected to tell the European Court of Justice (ECJ) that Talgo’s technological know-how could be given to Russia by Hungary, which is widely regarded as the Kremlin’s closest ally in the EU.

The Spanish association of minority shareholders in publicly listed companies plans to contest the decision, saying the government is jeopardising Talgo’s future.

Ganz-MaVag has already indicated its intention to challenge the veto in court. Hungary would likely win an ECJ case, Spanish media reported.