Hungary 4iG to acquire majority stake in Rába
4iG makes an offer
The project company of 4iG Space and Defence Technologies Ltd (4iG SDT Ltd), 4iG SDT EGY Zrt, is acquiring a majority stake of 74% in Rába Nyrt through over-the-counter share purchase agreements.
It is also making a binding public offer to purchase the remaining shares at a price of HUF 1,789 per share.
Details of the transaction
Through the project company 4iG SDT EGY Zrt., which was established for the purpose of this transaction, 4iG SDT Zrt. is acquiring a 54.34% stake in N7 Holding Nemzeti Védelmi Ipari Innovációs Private Limited Company (Zrt.), as well as a 20% stake in Széchenyi István Egyetemért Alapítvány (the Széchenyi István University Foundation).
The share purchase agreements will take effect once competition authority approvals and other closing conditions have been met. To acquire the remaining 24.77% stake, 4iG SDT EGY Zrt. will make a binding public tender offer to minority shareholders holding publicly traded shares, in accordance with the Capital Markets Act.
In accordance with the legal framework, the company determined the uniform price of HUF 1,789 per share based on the equity per share, and this value remains consistent across all transaction elements. The public tender offer procedure may be concluded by mid-October.
Who are Rába's owners?
Rába has two major owners:
- N7 Holding Nemzeti Védelmi Ipari Innovációs Zrt. owns 54.34%, and
- the Széchenyi István Egyetemért Alapítvány (Széchenyi István University Foundation) owns 20%.
Put simply, 4iG will acquire these two share packages and make an offer to the other shareholders.
The free float currently stands at 25.66%, and 4iG is making a mandatory public purchase offer for these shares at HUF 1,789 per share.
Let's see some figures!
The nearly HUF 25 billion transaction will be financed through a combination of equity and external credit sources.
Therefore, we know that the total transaction is worth nearly HUF 25 billion. Dividing this amount by Rába's total of 13.47 million shares
gives us HUF 1,856 per Rába share.
Meanwhile, the offer price for free float shares is HUF 1,789.
This apparent contradiction can be explained by the fact that 4iG is likely to pay a higher price per share to the two major shareholders, N7 Holding and the Széchenyi István University Foundation.
According to our calculations, this price is HUF 1,878 per share.
What is 4iG buying?
With a history stretching back nearly 130 years, Rába is Hungary's leading automotive industry group. The group manufactures and supplies chassis, components and parts for commercial and passenger vehicles for the global automotive market. Its main export markets are North America and the European Union, although its products are also available in Japan.
Rába has decades of experience in the defence industry. Its vehicles have been used by the Hungarian Armed Forces for years, and the company also works with domestic and international partners, including the Turkish defence manufacturer Nurol Makina, through its joint venture, Gidrán Armoured Vehicles Ltd.
The main objective of the transaction is to integrate ground mobility capabilities into the 4iG SDT Zrt. portfolio. By incorporating Rába's military vehicle manufacturing capacities and expertise, 4iG's defence subsidiary will strengthen its defence-related land mobility capabilities, thereby completing its defence industry portfolio.
In line with the planned strategic cooperation with Széchenyi István University, 4iG SDT Zrt. will strengthen its presence in Győr. This will contribute to developing the region's industrial knowledge base, as well as expanding research, development and engineering training, the company said.
4iG is continuously expanding its space and defence businesses, and there is no shortage of announcements and agreements. The company began its expansion into the defence industry several years ago, forming one of its first strategic partnerships with Rheinmetall. However, the process really gained momentum last year with a series of announcements in the space and defence sectors, including a satellite programme, a space manufacturing centre and defence industry agreements.
The significant change in the price of 4iG shares occurred when Gellért Jászai met with Elon Musk in December, which appears to have been the moment when investors truly began to believe in the company's potential. Since then, in addition to Rheinmetall, 4iG has partnered with major companies such as L3Harris, Axiom Space and Azercosmos.
Other important agreements this year include:
- In February, 4iG's subsidiary signed an agreement with the Polish space company Creotech Instruments to explore opportunities for cooperation in European space programmes.
- Also in February, 4iG's space industry subsidiary and CPI Vertex Antennentechnik also signed a contract relating to the company's HUSAT satellite programme. The agreement covers the purchase and installation of antennas at two satellite ground stations in Hungary. This agreement marks a significant milestone as it is the first major supplier contract in the implementation of the HUSAT satellite ecosystem.
- In April, 4iG's defence industry subsidiary signed a letter of intent with the United Arab Emirates-based EDGE Group regarding potential cooperation opportunities in the aerospace and drone industries.
- Perhaps the most significant announcement was that 4iG would be permitted to acquire the majority of the Hungarian state's interests in the military industry. While critical infrastructure, such as military real estate, factories and plants, would remain state-owned and legislation would guarantee continued state access to defence capabilities, 4iG would be responsible for operations and international orders. According to the plans, 4iG will hold a 75% in the newly formed company, N7 Defence.
- In July, 4iG SDT Zrt. and Gharysh Sapary, Kazakhstan's state-owned space company, signed a preliminary agreement.
- Recently, a subsidiary of 4iG entered into a preliminary, non-binding agreement to acquire a 63% stake in HeliControl Ltd..
- And the list goes on. 4iG Chairman Gellért Jászai is conducting negotiations around the world as an authorised ambassador, including visits to the Pentagon, Lockheed Martin and SpaceX.
- In recent days, Gellért Jászai held talks in Türkiye and met with the management of Nurol Holding, including Chairman Oğuz Çarmıklı and several other directors. As the owner of Nurol Makina, the manufacturer of the Gidran 4x4 armoured vehicles used by the Hungarian Armed Forces, the holding company is considered a key strategic partner in bilateral defence cooperation. The discussions focused on opportunities to strengthen relations between the Hungarian defence ecosystem and Nurol Holding from technological and investment perspectives. Gellért Jászai also met with Professor Haluk Görgün, President of the Presidency of Defence Industries (SSB). Those in attendance included Hungarian Ambassador Viktor Mátis, István Sárhegyi (CEO of 4iG Space and Defence Technologies) and László Tömböl (military advisor). As the institution responsible for the development, procurement and international cooperation of the Turkish defence industry, the SSB plays a central role in strengthening Turkey's technological and industrial base.
A Czech company is also involved
Following the acquisition by the 4iG Group and the successful completion of the due diligence process for Rába Nyrt., CSG Defence (a subsidiary of the global defence industry player Czechoslovak Group) may acquire a 37% indirect minority stake in the company. Meanwhile, 4iG SDT Zrt. will obtain exclusive rights in Hungary for the sale, assembly, servicing and distribution of TATRA military vehicles. CSG Defence also has the option of acquiring up to a 49% in 4iG SDT EGY Zrt., representing a 37% indirect stake in Rába.
The Czechoslovak Group (CSG) is a global industrial and technology conglomerate owned by Czech businessman Michal Strnad. CSG supplies strategically important products, systems and technologies to the defence, aviation and automotive industries, among others, to help create a safer and more stable future.
The group's key production facilities are located in the United States, the United Kingdom, Spain, Italy, Germany, the Czech Republic, Slovakia, Serbia, Greece and India, and it exports its products worldwide. With more than 14,000 employees, CSG achieved sales of EUR 5.2 billion (EUR 4 billion on a consolidated basis) in 2024. According to the Stockholm International Peace Research Institute (SIPRI), this makes it one of the world's 100 largest defence companies.
The group's key subsidiaries include Excalibur Army, Tatra Trucks, MSM Group, Kinetic Group and Eldis. Based in Kopřivnice, Tatra Trucks is renowned worldwide for its heavy-duty trucks designed for extreme terrain. It is the cornerstone of CSG's mobility and defence divisions, and is one of the world's oldest commercial vehicle manufacturers.
In 2024, Tatra manufactured 1,548 vehicles, a significant proportion of which were for customers in the defence industry. Tatra is committed to continuous innovation in developing the next generation of its products, including the latest Force and Phoenix series. The company plays a central role in the development, production, modernisation and lifecycle support of wheeled armoured vehicles in CSG's defence portfolio.
Thanks to the company's professional knowledge, competence, and connections, CSG Defence's accession and potential future minority stake could support Rába's entry into the international market and secure long-term orders. According to a statement from 4iG, the long-term goal of the parties is for Rába to move up to second place in the global supplier ranking for TATRA vehicles, and to establish a manufacturing and development centre in Győr to serve the Central European region.
Can the shareholders be happy about this?
Last Friday, Rába closed at 1,580 forints. Compared to this, 4iG's offer of HUF 1,789 per share is 13% higher.
This year, Rába's share price rose by 25%. Over the past year, it increased by 20%. This means that the machine manufacturer's shares underperformed the broader Hungarian stock market. Over these periods, the BUX index rose by 30 and 43%, respectively.
Cover photo: Rába
