Senvion GmbHâ€™s failure to launch an initial public offering may leave the German wind turbine maker the target of a takeover bid as four of its biggest competitors combine to increase their own market clout.
Centerbridge Partners and Arpwood Capital Ltd, the turbine makerâ€™s owners, were thwarted in their aim to raise as much as 703 million euros ($780 million) by listing the Senvion groupâ€™s main subsidiary in Frankfurt.
While Senvion said Wednesday the setback wouldnâ€™t impact its growth strategy, the withdrawal raised questions among analysts who questioned how it will compete in a consolidating industry.
Senvionâ€™s cancelled IPO â€œmay make it an acquisition target nowâ€ depending on how its owners plan to leverage growth, said Douglas Lindahl, an analyst at Kepler Cheuvreux in Zurich, in a telephone interview. â€œThe big players will be the winners, striving for scale in a market shifting somewhat from Europe.â€ The cancelled IPO leaves Senvionâ€™s U.S. owners looking for a back-up growth strategy as they reevaluate the future of their company, which last year captured the most market share among Europeâ€™s wind-turbine manufacturers. Hamburg-based Senvion didnâ€™t comment declined to comment on its next steps.
Nordex SEâ€™s purchase of Acciona Windpower SA and Siemens AGâ€™s plan to buy a stake in Gamesa Corp Tecnolgica SA â€œare indicative of where things are moving, underscoring what may be logical moves in a drive for scale,â€ said Lindahl New Markets â€œBreaking into new markets is difficult and mergers are one vehicle that turbine makers are turning to,â€ said Christopher Rodler, an analyst at equity researchers Montega AG in Hamburg, in an interview.
Ending plans for Europeâ€™s biggest IPO this year may partly mark investorsâ€™ lack of appetite for equities amid Europeâ€™s sluggish economic recovery.
Countries including Germany and the U.K. are also implementing landmark changes to the way wind and solar investments are remunerated. European governments are switching to power auctions that limit remuneration for bidders who previously received guaranteed payments for all wind and solar power.
That move is being made to cut clean power costs on electricity bills. While wind energy became the European Unionâ€™s third-biggest power source last year, regulatory uncertainty may cause demand for turbines to dip in 2016, the European Wind Energy Association said. Consolidation Vestas Wind Systems last year ranked second globally in newly installed onshore capacity behind Chinaâ€™s Xinjiang Goldwind Science & Technology, according to Bloomberg New Energy Finance.
Combining Siemens wind unit and Gamesa would create the worldâ€™s third biggest onshore turbine maker, based on BNEFâ€™s 2015 rankings.
Nordex said in October it will pay cash and stock valued at 785 million euros ($871 million) for the wind assets of Acciona, averting overlaps in products and opening markets in South America for the maker of onshore turbines. Siemens may seek a 60 percent share of Gamesa.
A merger with the Spanish company could add business in Latin America and China.Source: Bloomberg.com