The Spanish government on Tuesday rejected a takeover bid by Hungarian group Ganz-Mavag for rolling stock manufacturer Talgo, citing “insurmountable” risks to the country's strategic interests and national security, EFE reported.
The government's approval was a legal condition for the offer to acquire 100 percent of Talgo shares, valued at around 620 million euros. According to foreign investment regulations, when a transaction exceeds 500 million euros, it requires government approval. The decision was made at a government meeting when the Foreign Investment Council – a body comprising several ministries and headed by the Ministry of Economy – considered that the purchase of Talgo by the Hungarian group would pose a risk to the country's strategic interests.
Close relationship between investor and Orban
The rejection of the operation is carried out in accordance with the provisions on the control of foreign investments and in full respect of EU law and the competences of the European Union in the field of foreign direct investment, the protection of the internal market and the free movement of capital, the Spanish media noted. On April 4, the Hungarian consortium Ganz-Mavag filed an application with the Spanish National Commission for the Securities Market (CNMV) to authorize the takeover offer of Talgo, meaning the purchase of 100 percent of its capital for a total amount of EUR 619.3 million, at EUR 5 per share. Some members of the government publicly expressed their opposition to this offer, emphasizing the close relations between the Hungarian investor and the government of Viktor Orban. Politicians argued that Talgo is a strategic company, with unique technology in the world and plays a key role in rail transport.
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