Siemens will take a 59 per cent stake in the new entity which is expected to have 69 gigawatts of turbines installed worldwide as well as revenue of €9.3bn (£7.3bn), it said in a statement today. It's also making a one-off cash payment to Gamesa shareholders.
While Siemens' wind power business has a strong footprint in North America and Northern Europe, Gamesa is well established in emerging markets such as India, Latin America and southern Europe.
Ignacio Martín, executive chairman and chief executive of Gamesa, said: "Today, we are embarking on a new era, creating, alongside Siemens, a world-leading wind player."
Gamesa shares jumped 6.3 per cent to €18.17 in Madrid, while Siemens shares swelled 1.4 per cent to €92.20 in Frankfurt.
"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," Joe Kaeser, president and chief executive of Siemens, said.
"With this business combination, we can provide even greater opportunities to the customers and value to the shareholders of the new company."