May 13

Vestas, the Danish wind turbine manufacturer, will acquire full ownership of an offshore wind venture from Mitsubishi Heavy Industries as the renewables industry focuses on high generation from sea winds, according to a Oct. 29 statement. The venture, called MHI Vestas Offshore Wind, supplies wind turbines, equipment and service to owners of offshore wind farms.

The announcement sent Vestas shares up more than 6% the day of the announcement, as the transaction also involved Mitsubishi Heavy Industries doubling down on its commitment to the wind generation industry.

The Japanese company will receive 709 million euros worth of newly issued shares in Vestas itself (a 2.5% stake) as payment for its half of the venture. Mitsubishi Heavy Industries will also gain a seat on the Vestas board of directors as part of the deal.

Meanwhile, Vestas will immediately begin planning the integration of MHI Vestas, focusing on synergies in sales, technology and lower costs. MHI Vestas is expected to generate 1.4 billion euros in revenue this year, with an EBIT margin of around 4%.

Wind generation over the next ten years will increasingly move off the coastline and into the sea to harness heavier, steadier winds for power. Manufacturers are locked in a fierce competition to deliver the maximum generation per turbine, giving investors the most bang for their buck. 

“Vestas is the leader in onshore wind, but to accelerate the energy transition and achieve our vision we must play a larger role in offshore wind,” Henrik Andersen, CEO of Vestas, said.

Competitors Siemens Gamesa and GE are both unveiling increasingly larger turbines offerings.

By Stephen Bierman

Stephen Bierman is an energy markets journalist and the editor of New Economy Observer.

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