Now that you have trumped Areva, what strategic advantages do you see in the REpower buy?
This is a very important deal for us strategically. The global market for wind power is growing at 30%, and we expect it to continue to grow in a range of 25-30% over the next five years. With the acquisition, we will be able to accelerate our growth in the European market, which comprises almost 50% of the world’s wind power market. The global wind power market is pegged at 15,000 mw. We could have done this organically, but the buy is a big leap for us. Moreover, REpower has strong technology development capability, and an innovative approach to product development. The integration of our research and development strengths in components with that of REpower’s will help speed up our technology development programmes.
You have positioned Suzlon as an end-to-end solutions provider. How has this been helpful in identifying synergies with REpower?
Catering to the entire supply chain is very important in this business. Being in this business for the last eleven years, we have understood that supplying the product where it’s being demanded is critical. And, for this, we have been beefing up our component manufacturing. Components supply works on 36-month cycles, so we were able to procure components easily due to this far-sighted initiative. REpower does not make components, it assembles. Now, we’ll supply components to them.
How will shareholders view the deal?
The structure gives us the majority voting rights while deferring the cash outflow. The outflow of funds for Areva’s holding will take effect after one year, whereas for Martifer, it will be after two years. The combined strengths of the three companies will create significant value to the stakeholders of REpower.
What impact will the acquisition have on Suzlon’s market share?
The buy will complement the market shares of both the companies. REpower was the 7th largest, and we were the 5th. The new company will be the 4th largest in the world. REpower has a strong onshore and offshore product portfolio, including the world’s largest and commercially proven 5-mw wind turbine.
Source : http://www.financialexpress.com/fe_full_story.php?content_id=165276