Tuesday, September 21, 2010

Vestas Could Be A Takeover Target

Vestas, the listed Danish wind turbine manufacturer, is seen as a takeover candidate.  According to our sources, since Vestas’ share price dropped by 43% over the last year, the company now looks more attractive for a takeover.

Vestas has leading market share of installed wind power turbines and a possible acquisition would give a potential buyer both market share and access to premium wind turbine intellectual property and technology. Large Korean or Chinese companies are the most likely bidders. For example, Korean companies such as Hyundai and Samsung would make it easier for Vestas to compete against other large conglomerates such as GE and Mitsubishi.

As the oil prices have been coming down from their peaks most wind projects have been put on hold.  The rise of over-burdened governments with huge debt has inevitably led to the end of green subsidies coupled with much tougher price competition from larger competitors such as GE. All of these trends are making it very difficult for much smaller players like Vestas to compete for deals that getting smaller and lesser.

Vestas’ chairman Bent Erik Carlsen said that he doubts the Danish company will receive any takeover offers, but added that Vestas’ board will naturally have to consider an offer if one were to be made.

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