Spain blocks Hungarian takeover bid on Talgo for national security reasons

Spain blocks Hungarian takeover of Iberian trains. The Spanish government has rejected a public offer on the stock exchange (Opa) made by the Hungarian Ganz Mavag (Magyar Vagon) group, which was aiming to take 100% of the Talgo train manufacturer. Madrid's Ministry of Economy justified the decision by invoking national security. A cquisition worth more than EUR 600 million disappears.

Upon news of the veto by the executive led by Pedro Sanchez , who had been against the takeover bid from the outset, the National Securities Market Commission (Cnmv) the stock exchange authority, suspended Talgo's shares, which were at that moment registering a drop of more than 1%. "The Council of Ministers agreed today not to authorise direct foreign investment in Talgo by Ganz Mavag for reasons of protection of Spain's strategic interests and national security," announced a communiqué released after today's ministerial meeting, anticipated by El Correo. According to the executive, the purchase of the Spanish train manufacturer by the Magyar group entails 'insalvably high' risks for the guarantee of national security and public order.

For the Iberian government, Talgo is a strategic company in a key sector for the country's economic security, territorial cohesion and industrial development. And the veto on the operation is in application of existing regulations in Spain on the control of foreign investments and in full compliance with EU law and the European Union's competences on foreign direct investment, protection of the internal market and free movement of capital. The legislation was passed in the midst ofCovid 19 to prevent foreign groups from taking advantage of the fall in the stock market of Spanish companies to take control of them. It is a 'balanced and internationally benchmark regulatory framework', the note specified, as it makes the attraction of investments compatible with the defence of national interests. The offer presented in April by the Hungarian group valued Talgo at around 619 million.