foto: Guillermo Marina / CC BY-NC-ND 2.0 / Flickr/Talgo logo; illustrative photo
A few months on from crisis, Talgo returns to form with German approval—leaving Škoda’s bid on the sidelines.
A few months ago RAILTARGET reported that the Spanish train manufacturer Talgo was struggling. The company faced delays on a German contract, penalties and the threat of a takeover, in which, alongside a Hungarian investor, the Czech manufacturer Škoda Transportation was also involved. On 8 August, Talgo obtained key technical approval for the operation of its long-distance trains in Germany, which opens the way for it to get back in the game. On this occasion, we looked at how the drama around Talgo turned out.
Talgo: Hungary vs Škoda
Briefly recall why the problems of one Spanish company caused such a stir a year ago. Talgo is a significant train manufacturer: it has annual revenues of around EUR 720 million, more than 200 of its high-speed trains run worldwide — and in its home Spain it has a market share of over 60 percent. From the perspective of high-speed lines, Spain is a world power. The local high-speed rail network measures almost four thousand kilometres and is the second largest in the world (after China).
Therefore, when Talgo ran into problems fulfilling a huge contract with Germany’s Deutsche Bahn for the delivery of long-distance trainsets and a Hungarian consortium, Ganz-Mavag Europe, tried to exploit its difficulties with a takeover offer, the Spanish government blocked the attempt. The argument was national-security concerns due to possible Russian links of the "raider".
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It is noteworthy that the takeover offer amounted to EUR 620 million, i.e., one hundred million below annual revenues — at a time when the company had binding contracts for trains worth more than EUR 5 billion. On the other hand, the price offered represented a 25 percent premium over Talgo’s then share price on the stock exchange. The Czech manufacturer Škoda Transportation also expressed interest in Talgo. However, its offer also failed. It was not dismissed by the Spanish government, but by Talgo’s management and its shareholders. Unlike the Hungarians, who wanted simply to take over the company, Škoda offered a merger, which shareholders did not consider attractive.
Instead of foreign investors, in February 2025 Talgo was taken over by a Basque consortium led by the local steel company Sidenor. Other participants are the regional Basque government and the local bank Kutxabank. For the main shareholder of Talgo, the investment fund Trilantic, this is a significantly worse solution compared to the Hungarian offer. The price corresponds to a valuation of the entire company at EUR 595 million — but only if financial targets are met; otherwise it will be almost one hundred million euros less.
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Late, But Still: Talgo Obtains Technical Approval from ERA and EBA
On Friday, 8 August, Talgo obtained technical approval from the European Union Agency for Railways (ERA) and the German Federal Railway Authority (EBA) for the operation of its Talgo 230 long-distance trains (type ICE L, i.e., Intercity Express Low-floor) in Germany. This is a significant milestone in a long process that began as early as 2019 with a contract for 23 units for EUR 550 million, later expanded to up to 100 trainsets for EUR 2.3 billion. Deutsche Bahn promises to deploy the first four trainsets from the December timetable change, most likely on the Berlin–Cologne route.
Despite all the fanfare, it should be recalled that the original 2019 framework agreement envisaged the first trainsets being deployed as early as December 2023. That notion quickly fell apart and the German railways quickly reconciled themselves to a one-year delay — but even compared with that, Talgo is (another) year late. And that is not all: for the time being, the trains will be hauled by substitute Siemens Vectron locomotives, because the homologation finally obtained concerns only the coach portion of the trainset (with a driving trailer). By contrast, the multi-system Talgo 105 locomotives have further delays.
This solution will also apply to the Danish railways, which concluded a similar contract to DB and for which the just-granted homologation likewise applies. By contrast, the large order for Talgo 230 trains by Flix for up to EUR 2.4 billion provides for Siemens Vectron locomotives as a permanent solution.