Gamesa, Siemens to Combine Wind Turbine Business -- Update
17 June 2016 - 8:21PM
Dow Jones News
By Christopher Alessi and Carlos Lopez-Perea
MADRID--Spain's Gamesa Corporación Tecnológica SA said on Friday
it had agreed in principle to combine its wind power activities
with those of the German engineering group Siemens AG, in a deal
that would create the world's largest producer of
wind-turbines.
Gamesa has given "the necessary corporate approval" for the
merger, the Spanish company said in a statement sent to Spain's
stock market regulator. The final terms of the deal must still be
finalized, the statement noted.
The regulator then suspended trade in Gamesa shares, which had
closed Thursday at EUR17.10 ($19.23) after rising 0.8% on the
day.
Siemens shares closed up slightly on Thursday, at EUR90.89, and
were up 1.6% in early morning trading on Friday.
Siemens declined to comment Friday morning.
Gamesa's announcement followed months of negotiations between
the two companies.
Siemens and Gamesa had, in February, agreed in principle to
combine their wind businesses but the tie-up was delayed because
Gamesa needed to renegotiate part of an offshore wind joint
venture, known as Adwen, with French nuclear-engineering company
Areva SA.
The Wall Street Journal on Wednesday reported that the issues
surrounding Adwen had been in resolved in principle, according to
people familiar with the matter, and that Siemens and Gamesa were
close to announcing the long-anticipated deal.
As part of the agreement, Siemens could transfer its offshore
wind activities to the Spanish company in exchange for a stake of
about 60% in a future enlarged business, the people said. The
companies would also likely seek a buyer for Adwen as part of that
agreement, though Adwen would be integrated into Siemens' and
Gamesa's future combined business if no buyer is found, these
people explained.
The new entity would likely have a market capitalization of
roughly EUR10 billion, remain listed on the Madrid Stock Exchange
and be led by Gamesa Chairman Ignacio Martin, the sources said.
The agreement would create a new global market leader in wind
energy by capacity, surpassing China's Xinjiang Goldwind Science
& Technology Co., Denmark's Vestas Wind Systems A/S and General
Electric Co., according to FTI Consulting.
While the deal needs to be approved by Gamesa shareholders, who
will convene at the company's headquarters in Zamudio in northern
Spain next week, a vote on approval is likely to wait on
finalization of the terms of the deal.
Areva on Wednesday separately announced plans to split the
state-controlled nuclear-engineering group in three, as part of a
comprehensive restructuring plan that would see the company sell
its renewable energy assets overtime.
Monica Houston-Waesch and Eyk Henning also contributed to this
article.
Write to Christopher Alessi at christopher.alessi@wsj.com and
Carlos Lopez-Perea at carlos.perea@wsj.com
(END) Dow Jones Newswires
June 17, 2016 06:06 ET (10:06 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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