Rail Cargo Austria (RCA), the freight unit of state-owned Austrian railway company ÖBB, confirmed that it must sell its 5.7% stake in GySEV, a regional railway company also owned by the states of Hungary and Austria, as a condition for its acquisition of MÁV Cargo, the privatized freight unit of Hungarian railway company MÁV.
Though the deadline for the sale of the GySEV stake is not yet known, the European Commission has given a green light - with conditions - for RCA's purchase of MÁV Cargo, and the company wants to close the transaction by December 2, RCA spokesman Thomas Berger said.
On Tuesday, the European Commission said it cleared the MÁV Cargo acquisition, but noted the “decision is conditional upon RCA's commitment to remove structural links and review contractual links to GySEV.”
The Austrian press reported that GYSEV agreed to withdraw from the consortium when the European Commission expressed worries about the deal.
“The Commission identified serious competition concerns that would have arisen from the implementation of the proposed transaction, as originally notified,” the European Commission said in a statement on Tuesday.
EU Competition Commissioner Neelie Kroes announced in the statement that “I welcome any positive developments for consumers, and I am very pleased that we have managed to address quickly the competition concerns that we had in this case.”
MÁV CEO István Heinczinger told MTI that the company is pleased with the European Commission's decision to permit the sale of MÁV Cargo, adding that the commission's conditions must be given careful examination in order to determine their practical implications.
Heinczinger told MTI that if the transaction can be concluded in December, MÁV will have access to proceeds stemming from the deal before the end of the year. The MÁV CEO said that MÁV would use the revenue for capital replenishment, to pay off debts with unfavorable conditions and to finance investment aimed at increasing passenger comfort and safety.
GySEV CEO Csaba Székely told MTI that the company would provide comment on the issue after it had time to analyze the European Commission's decision.
The Hungarian business daily Napi Gazdaság reported on Monday that unnamed sources close to Rail Cargo Austria had informed the newspaper that the Rail Cargo Austria would go through with its purchase of MÁV Cargo even without the participation of GySEV.
A consortium of RCA and GySEV won a tender in May 2007 to buy 100% of MÁV Cargo with a bid of HUF 102.5 billion and a promise to spend HUF 43.5 billion on developments at the company within five years.
The state of Hungary owns 61% of GySEV, the state of Austria owns 33.3% of the railway company and Rail Cargo Austria-unit Spedition Holding owns the remaining 5.7%. (MTI – Econews)