Siemens Energy has tabled a £3.5bn (€4.05bn) bid to snap up the remaining third of shares it does not own in its troubled wind energy unit, listed in Spain.
It confirmed the bid for renewables specialist Siemens Gamesa today, which was authorised by the Spanish stock market regulator CNMW earlier this week.
Siemens Energy first announced its plan in May, to improve its control over operational problems at the division – which issued three profit warnings in less than a year.
The division has been struggling to compete with cheaper Chinese imports, amid growing emphasis on supply security across Europe.
Its chief executive Jocken Eichkolt last month called for a quota to protect the volume of turbines installed across the continent produced in the European Union (EU).
He told The Financial Times: “We feel that there is an imbalanced battle, or at least we do not have the same level of opportunities here. We are asking for a level playing field.”
Siemens Gamesa was the third-largest maker last year of newly installed wind turbines across Europe.
However, it suffered a loss of €1.2bn in the nine months ended in June, which was 233 per cent more than the loss suffered in the same period a year earlier.
It recently announced it was slashing 2,900 jobs, accounting for 10 per cent of its global workforce.
The company also sold a portfolio of assets to SSE to ease its financial difficulties, in a deal worth hundreds of millions of pounds.
Europe grapples with China’s wind dominance
European turbine manufacturers have been struggling amid soaring inflation – which has driven up the cost of key materials like copper and steel, while supply chain disruptions from the pandemic have also slowed down trade.
This is despite the EU’s ambitious climate agenda – RePowerEU – which targets a ramp up in renewable energy generation from 32 to 45 per cent of the continent’s overall mix.
Meanwhile, Chinese rivals have been boosted by rapid wind adoption in their home country and have been able to offer much lower prices.
Top Chinese manufacturers represented 53.5 per cent of new global turbine installations last year, according to the Global Wind Energy Council, up from 36.6 per cent in 2018.
Siemens is imposing a 36-day acceptance period, with a deadline of 13 December.
During the acceptance period, Siemens Gamesa’s shareholders who wish to do so may tender their shares in exchange for €18.05 euros per share in cash.
The price offered by Siemens Energy includes a premium of 28 per cent over the last unaffected closing share price of Spanish-listed Siemens Gamesa.