The Spanish government announced on Friday that it is closely monitoring the public takeover bid announced by the Hungarian consortium Ganz Mavag Europe for rail construction Talgo, and assessed that the company is “strategic” for Spain, AFP reported.

In a statement sent on Thursday evening to the Spanish Capital Market Supervisory Authority (CNMV), Spanish train manufacturer Talgo said it has become the subject of a public takeover bid for all its shares by Ganz Mavag Europe, a consortium made up of rail group Magyar Vagon and of the Hungarian State Fund Corvinus Zrt.

The takeover offer, which values ​​the Spanish train maker at 619 million euros, is a “friendly” offer, Talgo said, adding that it issued a “preliminary positive opinion” on the takeover deal, given that the price of 5 euros per share offered by the Hungarian consortium, is considered “attractive for shareholders”.

Instead, on Friday, the Spanish Ministry of Economy stressed that it would be “vigilant about this operation”, considering it necessary to “guarantee the stability” of the Spanish producer and the interests of Spain.

The government in Madrid isn’t too happy about the idea

“The government will analyze all the details of the transaction, as it is a company that works in a strategic sector,” insisted Spain’s Ministry of Economy, which assured it would seek a “balanced” position so that Spain remains “attractive” as an investment destination.

According to the Spanish press, Madrid’s concerns mainly concern the links between Ganz Mavag Europe and the government of Prime Minister Viktor Orbán, who is considered an ally of Russian President Vladimir Putin.

The Ministry of Economy of Spain recalled that, starting from 2020, it has strengthened the control of foreign investments in sectors considered strategic, especially in the so-called critical infrastructures, in the field of health and safety. This device, introduced at the beginning of the pandemic, obliges foreign companies wishing to acquire more than 10% of a Spanish company, which is considered a priority, to request prior state approval through the Council of Ministers.

Founded in 1942, the Talgo group is the main supplier of trains for the Spanish railway company Renfe. The company, the main shareholder of which is the investment fund Trilantica, exports trains to, in particular, Germany, Saudi Arabia, Denmark, Egypt and the USA.