Spanish Train Maker Talgo Explores Acquisition by Sidenor Amid Political Controversy.

Talgo, a Spanish train manufacturer, has entered negotiations with Basque steelmaker Sidenor for a potential acquisition. This development follows a recent €619 million takeover bid by a Hungarian consortium, which was vetoed by the Spanish government on national security grounds. The Hungarian bid, backed by Prime Minister Viktor Orbán, sparked political tensions between EU member states.

Talgo has been facing production capacity issues, struggling to fulfill orders for clients such as Deutsche Bahn and Renfe. The company is now exploring a possible transaction with Sidenor that could involve the acquisition of a significant percentage or all of Talgo's share capital. Spain's economy minister, Carlos Cuerpo, has expressed readiness to support Talgo in finding a viable long-term solution.

The Hungarian consortium, Ganz-Mavag, has vowed to take legal action against Spain's veto, although there are signs of waning interest. The Spanish government's concerns reportedly relate to the potential transfer of train technology that Ukraine needs for strengthening its rail links with the EU. Meanwhile, Talgo has signed a preliminary deal with Polish rolling stock maker Pesa to provide technology for high-speed trains in Poland, highlighting the growing market for train sales in Eastern Europe.

Report by Financial Times