Spanish rail manufacturer Talgo is seeking further information about a merger offer from the Skoda Group after receiving a “business combination” proposal from its competitor.
The company released a statement confirming that it had been given a “business combination and industrial integration” proposal but had not seen an economic offer from Skoda, prompting it to ask for detailed information.
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Specifically, Talgo said it would be looking to evaluate if the offer was of a value “considerably greater than that offered by Ganz-Mavag Europe Zrt” in a €619m ($676m) takeover bid announced in March.
While the Hungarian consortium’s bid had progressed since March, gaining approval from Spain’s National Securities Market Commission in May, the deal is also under scrutiny from the Spanish Government over Ganz-Mavag’s suspected links to Russia.
Spain’s concerns primarily related to Ganz-Mavag’s partial government ownership and Hungary’s close ties to Russia. The Czech company, owned by PPF, Skoda Group has reportedly been chosen by the government as a safer alternative to combine with Talgo.
However, Talgo’s explicit interest in the value of Skoda’s proposal for shareholders, and its board of directors’ approval of Ganz-Mavag’s offer, which represented a 14.42% premium on Talgo shares, means Skoda will have to work hard to prove the value of its proposal.
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By GlobalDataIf it goes ahead, a Talgo-Skoda merger could create a new rail manufacturing giant in Europe, with both companies already boasting a significant industry presence.
Talgo is already a popular supplier with deals like its high-speed train contracts in Spain while Skoda has healthy relationships with operators in areas such as Switzerland and Bulgaria, alongside ambitions to further its presence outside the continent.
