Wind turbine manufacturing giant Siemens Gamesa Renewable Energy (SGRE) has agreed a €200m ($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.
The acquisition, which will also include all the Senvion’s associated intellectual property, will see the SGRE take on some 2,000 Senvion employees.
“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," SGRE chief executive Markus Tacke said.
The addition of the Vagos blade plant will help strengthen SGRE's industrial value chain and reduce dependency on supplier sourcing from Asia, mitigating volatility amid the uncertainties brought about by current global trade issues, the OEM explained.
"Mostly, it will take expected future volumes from Asia into Europe, improving our capacity to make rather than buy blades, reducing our dependency on the Asian market – giving current challenges in the supply market," Tacke said at a conference call on the deal.
Subject to obtaining the necessary regulatory approvals, SGRE 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.
“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, securing close to 60% of all jobs for now,” Senvion chief executive Yves Rannou said.
For other parts of Senvion, a wind-down process has begun in order to secure socially acceptable solutions for remaining employees and an orderly liquidation of remaining assets, Senvion added.
German media have earlier said layoffs would take place at Senvion's German production sites, in particular at turbine manufacturing in Bremerhaven, where 200 workers could lose their jobs.
For Senvion's Indian operations and non-European service operations, exploratory talks with potential investors continue.
Asked by Recharge, why Siemens Gamesa wasn't interested in Senvion's Indian assets, Tacke said: "We are established there (in India) with a known footprint. We feel very confident and strong about our capabilities in India, so we are focusing on the area, where Senvion has been specifically strong, which is on Europe."
The sale comes after Senvion in April had filed for insolvency under self-administration after talks with lenders failed. The struggling OEM has a nacelle plant in India with a production capacity of up to 1GW, and extensive global service contracts.
Senvion’s financial difficulties were exacerbated by turbine price pressures and the collapse of the German onshore wind market that have also plagued other wind OEMs.
Rival mid-sized German-Spanish player Nordex earlier this month was helped by its largest shareholder, Spanish conglomerate Acciona, through a €99m ($110m) capital increase. The transaction will result in Acciona boosting its share in Nordex to 36.3%, a level forcing it to launch a take-over bid for all of Nordex.
UPDATED with more comment by Siemens Gamesa CEO Markus Tacke