By Andrew Lee, London & Alexandre Spatuzza, São Paulo
Thursday, April 24 2014
Updated: Thursday, April 24 2014
US industrial giant GE is today being linked with a $13bn takeover of France’s Alstom – a deal that would have big implications for the wind power sector.
Negotiations are ongoing and a deal between the two could be announced as early as next week, according to Bloomberg, which cited unnamed sources close to the matter.
GE has signalled an intention to develop its industrial-facing business, analysts said.
Buying Alstom would bring GE a host of industrial assets in transport and power sectors – including the French group’s onshore and offshore wind turbine operations and its Alstom Grid business.
Consequences of a tie-up would include a consolidation of two big wind-power players in the Brazilian market, where Alstom has emerged as a major rival to the US group.
Alstom has invested R$80m ($35m) in a nacelle assembly plant and in a tower-making facility. GE has invested in a turbine assembly plant, expanded its turbine factory in the city of Campinas and is setting up a wind-power service centre and research laboratory.
GE says it has 500 turbines installed in Brazil, while Alstom's trump card is its ECO 122 machine and a €1bn supply deal with local developer Renova, which has 1.2GW in projects
Along with a dozen turbine, tower and blade manufacturers in Brazil, Alstom and GE are competing in the fast growing wind market that should quadruple to around 13GW by 2018 from current installed capacity of 3.6GW.
An Alstom acquisition would also give GE a seat at the table in the European offshore wind sector, where Alstom and its 6MW Haliade turbine are set to fight for orders with rivals such as Vestas, Siemens and Areva.
A GE acquisition would have the backing of Alstom’s biggest shareholder, Bouygues, which owns about 29% of the French industrial group, the report claimed.
Alstom – which saw its shares leap by up to 15% in early trading in Paris this morning – said in a statement: “In response to recent speculation in the economic press, Alstom is not informed of any potential public tender offer for the shares of the company.
“The group constantly reviews the strategic options of its businesses.”
Note: Update adds further detail on Brazilian market