Siemens and Gamesa intend to merge

Monday, 20 June, 2016 - 09:30
The merger between Siemens Wind Power and Gamesa is going to create an industry giant in onshore and offshore wind power. (Photo: Siemens)
The merger between Siemens Wind Power and Gamesa is going to create an industry giant in onshore and offshore wind power. (Photo: Siemens)

A major merger in wind turbine manufacturing is just around the corner: Siemens Wind Power and the Spanish company Gamesa have announced binding agreements for merging the Siemens wind power business, including service, with Gamesa. The combined company will be based in Spain. Siemens will hold a 59% stake and Gamesa's shareholders will hold 41%.

The objective of the merger is to create a worldwide leading supplier for wind turbines. According to the partners, the existing business areas complement each other in markets, product portfolios and technology. Siemens Wind Power has a strong position in North America and northern Europe. The merger with Gamesa will help Siemens to enter emerging markets such as India, Latin America and southern Europe.

The combined company will be consolidated by Siemens and will have its headquarters in Spain. The onshore headquarters will also be located in Spain, while the offshore offices will be in Hamburg and Vejle, Denmark. Siemens and Gamesa expect the merger to create considerable synergy potential.

In the offshore sector, Gamesa has reached an agreement with Areva regarding their joint venture Adwen. Under this agreement, Areva will waive existing contractual restrictions. After consulting with Siemens, Gamesa has also granted Areva a put option on its 50% stake in Adwen as well as an option to acquire Gamesa's 50% stake. Both options can be exercised by Areva within three months. During the same period, Areva has the right (drag along) to sell its stake as well as Gamesa's stake in Adwen to a third party.

Evaluations from management

"The merger with Siemens constitutes recognition for the work performed by the company in recent years and evidences our commitment to generating value in the long term by creating significant synergies and extending the horizon of our profitable growth. Today, we are embarking on a new era, creating, alongside Siemens, a world-leading wind player. We will continue to work as before, albeit as part of a stronger company and with an enhanced ability to offer all of our customers end-to-end solutions", said Ignacio Martín, Executive Chairman and CEO of Gamesa.

"The combination of our wind business with Gamesa follows a clear and compelling industrial logic in an attractive growth industry, in which scale is a key to making renewable energy more cost-effective. With this business combination, we can provide even greater opportunities to the customers and value to the shareholders of the new company. The combined business will fit right into our Siemens Vision 2020 and underlines our commitment to affordable, reliable and sustainable energy supply", said Joe Kaeser, President and CEO of Siemens AG.

"As a leading wind power player, especially in emerging markets, Gamesa is a perfect partner for us. Teaming up will enable Siemens and Gamesa to offer a much broader range of products, services and solutions to meet customer requirements. The move will put Siemens and Gamesa in the best position to shape the industry for lower cost of renewable energy to the consumers", said Lisa Davis, member of the Managing Board of Siemens AG.

The transaction is still subject to approval by Gamesa's shareholders and other usual conditions such as approvals from the competition authorities. The transaction is expected to be completed in the first quarter of the calendar year 2017.

Ralf Ossenbrink / Siemens

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