Ganz-Mavag Withdraws Talgo Bid After Government Opposition

Spain’s Council of Ministers decided not to authorize the foreign direct investment after an analysis by the Foreign Investment Board indicated that the deal would “entail risks to guarantee national security and public order.”

This decision means that Talgo must now seek an alternative buyer for the company, despite recently rejecting an offer from Czech engineering firm Skoda Group, deeming it less competitive than Ganz-Mavag’s proposal.

The government’s opposition to the Hungarian company’s acquisition of Talgo was long known and stemmed from concerns about Ganz-Mavag’s suspected links to Russia, owing to its partial ownership by Hungary’s state investment fund.

While Skoda’s offer was smaller than Ganz-Mavag’s €619 million ($686 million) bid, it was reportedly favored by the government as a safer alternative for Talgo, which is considered a “strategic company” due to its access to sensitive information regarding Spain’s rail network.

Although the Spanish rolling stock manufacturer is aware of the negative optics associated with returning to Skoda, the Czech company has indicated a willingness to maintain dialogue with Talgo even after its offer was rejected, likely bolstered by the knowledge of government support.

Nonetheless, Ganz-Mavag stated that while it has withdrawn its current offer, it does not rule out future acquisition opportunities for Talgo and plans to appeal the government’s decision, believing that “there are no well-founded reasons” for the council’s opposition.