India enters battle for German wind-turbine builder

dpa German Press Agency Published: Friday February 9, 2007

New Delhi- Indian wind-energy company Suzlon Energy unveiled Friday a hostile counter-bid for a growing German wind-turbine builder, REpower, putting it on a collision course with giant French nuclear group Areva. REpower Systems' board had already welcomed a January 22 offer from Areva, which is 87 per cent owned by the French public sector. No immediate comment could be obtained Friday from Hamburg-based REpower.

The Suzlon bid, valuing the German company at 1.02 billion euros (1.33 billion dollars), was issued by Suzlon Windenergie GmbH of Rostock, Germany, which is 75 per cent owned by Suzlon Energy Ltd with the rest held by Martifer SGPS of Portugal.

Suzlon bid 126 euros (164 dollars) per share, 20 per cent more than Areva's 105-euro-per-share bid.

REpower is set to build 325 windmills this year and 420 next year, profiting from tax breaks in European nations for emission-free, renewable energy. In Germany, utilities are legally obliged to buy all wind-generated power that is offered to them.

The company's three sites in northern Germany and offices abroad employ 880 people. Both Martifer and Areva are already shareholders in REpower. Martifer currently holds a 25.4-per-cent stake, while Areva owns 29.9 per cent.

The bid set off a frenzy of buying on the Frankfurt Stock Exchange with REpower Systems stock topping out at 145 euros before settling back to 142.37 euros as of mid afternoon, a gain for the day of 26 per cent.

Areva responded Friday that it closely supported REpower's strategy in the past, and that REpower management regarded the French company as "the right partner."

REpower is Germany's third-largest maker of wind turbine generators after Vestas Wind Systems and Enercon.

Suzlon's chief executive Tulsi Tanti said the merged companies could obtain "global market leadership in the wind industry, with best-in-class products, outstanding research and development capability and an integrated supply chain."

He forecast the acquisition would also create 100 to 200 jobs in research and development in Germany.

Based in India's western city of Pune, Suzlon is the world's fifth largest wind turbine manufacturer in terms of market share.

Suzlon has expanded into China, the United States, Belgium, Denmark, Australia and Germany over the past five years. In 2006, it acquired Hansen Transmissions in Belgium at a value of 465 million euros.

Areva, which describes itself as a world leader in carbon-dioxide-free power generation, has often been the target of criticism from environmentalists over its manufacture of nuclear reactors.

It set a deadline of March 7 on its bid, which valued REpower at 850 million euros and represented a 17-per-cent premium over the mid-January price of the stock.

© 2006 dpa German Press Agency