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Siemens, Europe's biggest engineering group, could target
component makers for takeovers in its drive to become one
of the top three players in the wind energy sector.
Acquiring parts suppliers would accelerate the growth it
expects from its own business making wind turbines. Siemens
wants to increase revenues from its environmental portfolio
to €25 billion by next year from €19 billion in
2008.
Speculation about consolidation in the wind sector is not
new - talk often swirls that German players may be prey for
large conglomerates or utilities eager to expand in the sector,
which is set to be a goldmine in the energy market.
Analysts said that Siemens, a world leader in offshore turbines,
would likely use an acquisition to integrate backwards. "They
may buy (something) more like the components suppliers to
the turbine industry, which are relatively small companies,"
said JP Morgan analyst Andreas Willi - adding that he did
not see Siemens bidding for another turbine maker.
Companies such as California-based Power One, Germany's SMA
Solar Technology, or unlisted German group Kaco - all with
average annual sales of €200-€300 million - could
be potential targets for Siemens.
According to the Global Wind Energy Council, the market for
wind turbine installations was worth about €45 billion
in 2009, reaching 158 gigawatts. BTM Consult estimates global
installed capacity will more than double to 340 gigawatts
by 2013.
Siemens does not disclose figures for its wind power unit,
saying only its order backlog as of December stood at €6
billion.
Rivals have already started to expand their reach. General
Electric, the US top onshore power player and a Siemens rival
in healthcare and energy, last year bought Sweden's ScanWind.
Schneider Electric, which competes with Siemens industrial
products, bought Canada's Xantrex, maker of inverters and
other power electronics products, in 2008.
A Siemens source said - "While the focus is on organic growth,
one should never say never. One should not rule it (acquisition)
out altogether" though there is nothing concrete at the moment.
Jon Sigurdsen, manager of the Renewable Energy fund at Carlson,
a unit of Norwegian DnB Nor Group, says partnerships were
a more likely outcome than full-fledged takeovers.
"For Siemens, big M&A activity wouldn't make a lot of
sense as the wind sector is pretty much consolidated already
and few companies are left - but I wouldn't be surprised if
they enter partnerships as part of their growth strategy,"
he said.
Still, Siemens has an M&A track record in the renewables
sector, most notably last year's takeover of solar thermal
player Solel Solar Systems for $418 million.
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