Will Hungarian investors seize Spain’s largest rail vehicle manufacturer with Russian funds?

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Photo: PrtScr/Youtube

The Hungarian company Ganz-Mavag Europe Plc., a member of the MaVag Group, has initiated a voluntary takeover bid for 100% of Talgo’s shares, which is a Spanish manufacturer of high-speed trains. The move is aimed at fostering synergies between the two companies.

György Bacsa, the chairman of Ganz-Mavag Europe Plc., expressed that Talgo’s board of directors finds the offer favourable, emphasising the transaction’s focus on enhancing manufacturing and development cultures jointly. The strategic partnership is anticipated to benefit both parties, which will enable Talgo to expand its capacity and strengthen its presence in European and Eastern markets while facilitating MaVag’s manufacturing capabilities, according to Index.

The offer and the plans

Despite the struggling railway industry in the aftermath of the regime change in Hungary, MaVag has emerged as a significant player who sells Hungarian-built trainsets globally. Seeking further growth, MaVag identified the need for international strategic partnerships, finding a potential ally in the Spanish manufacturer. The board of directors of Talgo expressed favorability towards the offer from Ganz-Mavag Europe Plc. and emphasised its benefits for shareholders.

The chairman of the board of directors of Ganz-Mavag Europe Plc. stressed the importance of maintaining Talgo’s independence and technological prowess while committing to supporting its strategy as a Spanish-listed company. The chairman highlighted the shared goal of fostering European industrial development and sustainable mobility through strategic cooperation.

Spanish Transport Minister opposes the Hungarian bid

The recent developments in the Hungarian bid for the Talgo train factory include the Hungarian group’s agreement with Talgo’s creditors providing financial clearance. However, the Spanish Transport Minister Óscar Puente vows to reject the bid because of suspicions of Viktor Orbán‘s involvement and potential Russian connections within the Hungarian group, according to Telex.

The Spanish government led by Pedro Sánchez expressed scepticism towards Viktor Orbán’s involvement in the Hungarian bid for Talgo. The reason for the scepticism is fear of potential ties to Russian investors or the Hungarian state. Despite claims in Spanish business papers regarding the financial backing of the Hungarian group, data from Hungarian sources contradicts this information.

The Hungarian bidder must secure an agreement with Talgo’s lending banks to ensure financial stability as any change in ownership could prompt debt recall. However, political approval remains a necessity with documentation needing submission to Spain’s Ministry of Economy and subsequent review by the Foreign Investment Council. The recent statement from Minister Puente suggests a preemptive rejection of the bid by the Council of Ministers.

Is there a Russian connection?

The Hungarian group’s corporate registry revealed a Russian connection but the Russians sold their 50% stake in the company to MVBV Plc. after the start of the Ukrainian and Russian conflict. The other 50% owner is Cato Investments which is linked to András Tombor.

As of recently, the Hungarian state has acquired a 45% stake in the project company which oversees the acquisition of the Spanish train manufacturer for EUR 7,000, according to HVG. Moreover, a member of the National Capital Holding’s board is suspected of joining the project company’s supervisory board, which can lead to the growth of the Hungarian’s state influence over the company.

The majority shareholder of the company, the Hungarian Wagon Group, which was founded by the Minister of Defence Kristóf-Szalay-Bobrovniczky, is now owned by a private equity fund. This fund, which was formed through the government‘s privatisation of MÁV’s vehicle manufacturing and repair capacity, faces challenges in fulfilling significant orders from Egypt, which is also part of a partnership with Russia.

Read also:

  • Transcarpathia annexed to Hungary? Map revealed by Russian Security Chairman – HERE
  • Hungarian foreign minister: time is on Russia’s side – HERE

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