Suzlon Energy, India’s largest wind power company is in talks to acquire Germany’s REpower. Suzlon has made a public bid of €126 per share for REpower, in a counter-bid to Paris-based nuclear major Areva’s bid of €105 per share. Suzlon’s bid values the deal size at about $1.3 bn.
The bidding process is likely to continue for 4-6 weeks. Suzlon would fund the acquisition through a mix of debt and internal accruals. Areva is the No. 1 maker of nuclear reactors and has offered €105 per share for 70% of the German company. Suzlon’s bid is being made in partnership with Martifer, a unit of Portugal-based Mota-Engil SGPS. Martifer owns a quarter of REpower.
REpower is Germany’s third-largest maker of wind-power equipment after Vestas Wind Systems and Enercon. It reported a 9-month profit of €1 mn compared to a year-earlier loss of €8.3 mn. Martifer has a joint venture with REpower in Portugal. Suzlon and Martifer have signed a legally binding agreement, which sets out the terms for this offer. The offer will be made through BidCo, in which Suzlon holds 75% and Martifer 25% of the capital. Suzlon will finance the offer and Martifer will support it. Suzlon will seek the support of the REpower management along with Martifer for the offer and has claimed a strong interest in working with REpower’s existing management in the future.
Suzlon would retain Hamburg as the headquarters of REpower, and would create 100-200 highly qualified R&D jobs in Germany. REpower has operations in France and elsewhere in Europe, and is planning expansions in China, India and North America. Suzlon Energy is the market leader in Asia and the world’s fifth largest wind turbine manufacturer by annual installations. It is currently on a mega-expansion drive in the international market. It bought Belgium-based Hansen for $565 mn in March 2006. Suzlon is being advised on the acquisition by Yes Bank and ABN-AMRO.
Read the Business Standard and The Economic Times articles.
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