Siemens Gamesa has agreed to a €200 million ($223 million) deal for three units of the insolvent German manufacturer Senvion.
The all-cash deal, which is expected to close before March 2020, includes all the firm’s intellectual property, its European service business and a Portugal-based blade manufacturing site. Around 2,000 Senvion employees will join Siemens Gamesa, equivalent to around 60 percent of the Senvion workforce as of September this year. Further details are to be released during Siemens Gamesa’s November 5 quarterly earnings call.
“We are pleased that we have been able to give our colleagues in a large part of the European Onshore Services business and in our blade production facility in Portugal positive news today. Siemens Gamesa will be a safe new home for them,” said Yves Rannou, CEO of Senvion, in a statement.
Senvion has nacelle manufacturing capacity in Germany, Portugal and India, with a blade manufacturing facility in Poland, as well as the Portuguese plant to be acquired by Siemens Gamesa.
GTM understands that Senvion’s turbine manufacturing business is set to be wound down. Continuation projects will run into the middle of next year, securing more jobs for the time being.
Senvion has stated that it is in “explorative talks with potential investors” for other business units, including its Indian operations and its service business outside of Europe.
Siemens Gamesa touts benefits
Once closed, the deal will boost Siemens Gamesa’s services business with an additional 8.9 gigawatts, taking the entire service fleet to nearly 69 gigawatts. The firm lags behind rivals Vestas and GE Renewable Energy when it comes to assets under maintenance, as highlighted previously by Shashi Barla, Wood Mackenzie’s principal analyst for global wind supply chain and technology.
While the service deal provides the firm with more diverse revenue, the blade factory in Vagos will “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," Siemens Gamesa said in a statement.
Siemens Gamesa CEO Markus Tacke called the deal “a win for all parties.”
What is less clear is the specific area of interest in Senvion’s intellectual property. A statement from Siemens Gamesa did not offer any added detail.
“The intellectual property of Senvion allows Siemens Gamesa to further enhance its technology portfolio for future Siemens Gamesa development,” it said.
When the exclusivity agreement was signed, WoodMac’s Barla pointed to the potential of Senvion’s offshore business. The services and blade manufacturing acquisitions were both onshore-only and the IP has been purchased in its entirety.
“Senvion has been developing a 12-megawatt offshore turbine, but inadequate capital derailed progress. A few Asian buyers have flagged their interest in the offshore assets, and they could be a really good fit,” Barla said in September.
Having previously lagged behind MHI Vestas and Siemens Gamesa, GE Renewable Energy has secured several large offshore turbine orders in recent weeks. Its 12-megawatt Haliade-X turbines, currently the largest available for sale (though not yet being delivered), were chosen for a 1.2-gigawatt portfolio with Ørsted in the U.S. and a 3.6-gigawatt project in the U.K.