Spain blocks Hungarian rail bid over possible Russia ties

National security concerns — including potential links to Russia — drove the Spanish government’s decision to veto Hungarian consortium Ganz-Mávag Europe’s attempt to buy Spanish train manufacturer Talgo, Spanish newspaper El País reported Wednesday.
The Spanish government’s unprecedented decision to veto a takeover bid made by a group that is partially owned by the Hungarian government on national security grounds raises questions about the future of the Spanish company and Hungary’s reputation in international trade.
It’s the latest sign of how relations between Hungary and other EU countries have deteriorated over charges that PM Viktor Orbán government is strongly pro-Russian.
A spokesperson for Ganz-Mávag in Spain said the consortium would “take legal action both in Spain and in Europe” against the Spanish government’s decision. The move will almost certainly lead to a clash in Brussels, where the European Commission will likely be called on to mediate between Madrid and Budapest.
The Spanish government moved to block the deal after Spain’s National Intelligence Center and the Department of National Security submitted their reports on the €619 million takeover bid. While those documents are classified, Spain’s economy ministry on Tuesday confirmed the deal had been deemed to pose “insurmountable risks for national security and public order.”
According to the Spanish media, the veto is motivated by alleged ties that exist between Ganz-Mávag and Moscow, and the possibility that Talgo technology that could facilitate the transport Russian troops in Ukraine and beyond.
Talgo has developed a proprietary variable-gauge vehicle system that allows its high speed trains to automatically adapt to railway tracks with different gauges, permitting for quick cross-border travel. There are concerns that if Ganz-Mávag were to acquire Talgo, its designs could be shared with Moscow.
Hungarian state investment fund Corvinus holds a 45 percent share of the Ganz-Mávag Europe consortium; the remaining 55 percent is owned by Hungarian trainmaker Magyar Vagon group through the Ganz-Mávag Holding. The latter company was a subsidiary of the Russian train manufacturer Transmashholding and has historic financial links to the Russian Exim bank. While Moscow officially ended its participation in 2022, reports suggest that informal ties remain active.
Magyar Vagon director András Tombor earlier insisted that the group’s ties with Russia had been severed after the invasion of Ukraine, and the only current link is a project in Egypt, which “they must undertake because of a legal commitment.” But the classified Spanish intelligence reports allegedly show that the separation of the Russian and Hungarian businesses was just for show.
Spain’s left-wing government coalition has been wary of Ganz-Mávag’s attempts to acquire Talgo since it launched its takeover bid last year. In April, Transport Minister Óscar Puente raised the company’s alleged Russian links and expressed doubts over whether Hungarian factories could solve Talgo’s production shortage problem.
Puente urged the train manufacturer’s competitors, among them CAF, Stadler and Alstom, to counter the Ganz-Mávag offer, but Talgo’s owners appeared comfortable with the Hungarian deal. Earlier this month, the company turned down a merger with the Czech Škoda Group and appeared poised to move forward with the takeover, which has been approved by the Spanish National Securities Market Commission.
The government veto has led to a crisis for the company. Talgo’s shares dropped 10 percent shortly after the veto was announced on Tuesday.
Aitor Hernández-Morales contributed reporting.