German-Spanish wind turbine manufacturing giant Siemens Gamesa Renewable Energy (SGRE) has agreed a $225m deal to buy 8.9GW of the European onshore service business of embattled Germany-based rival Senvion along with its smaller rival’s blade factory in Portugal.
Senvion´s European service assets will strengthen Siemens Gamesa´s capacity and potential in an important segment. The acquisition of a Service fleet of 8.9GW from Senvion will take Siemens Gamesa to a total of nearly 69GW under maintenance, explained the turbine manufacturer in a press release.
The addition of these assets helps to diversify Siemens Gamesa´s business mix and geographical exposure with contracts that offer long-term visibility and renewal rates that have historically been very high.
The onshore blade manufacturing plant in Portugal is one of Europe´s most competitive manufacturing facilities. The Vagos plant would help to strengthen Siemens Gamesa´s industrial value chain and reduce dependency on supplier sourcing from Asia, mitigating volatility amid the uncertainties brought about by current trade issues. The highly competitive facility is complementary to existing SGRE blade capacity, has a best-in-class operational features and will help to support international sales.
The intellectual property of Senvion allows Siemens Gamesa to further enhance its technology portfolio for future Siemens Gamesa development.
“This transaction is an important step forward for Siemens Gamesa,” said Markus Tacke, Chief Executive Officer. “Bringing Senvion´s service assets on board will help us to drive growth in a key market segment and add important capacity in Germany and other important European markets, while the blade factory helps us mitigate the risk in the difficult trade environment. We´re bringing good people and good business into the company and that´s a win for all parties.”
As part of the acquisition, approximately 2,000 Senvion employees are expected to join Siemens Gamesa.
Subject to obtaining the necessary regulatory approvals and achieving other closing conditions, Siemens Gamesa expects to close the respective acquisition of assets in the first half of the fiscal year 2020 (October 2019 - March 2020), and as a result it will have no impact on financial performance in fiscal 2019.