How Suzlon won the bid for REpower

25 May 2007

REpower is one of Germany's leading manufacturers of wind turbines, with a 10-per cent share of the overall market.

Both Suzlon and Areva had made competing bids for REpower and acquired significant stakes in it, but Suzlon's higher €1.2 billion offer was recommended by REpower's board, leaving it in a strong position.

Areva, which had acquired a 30-per cent stake in REpower, conceded defeat and in a statement said it was "very unlikely" that it would be able to acquire sufficient shares to gain control of the business and therefore it would withdraw.

Suzlon's had acquired the German firm for €150 per share. Suzlon said it now effectively controlled 60 per cent of the firm's shares, although some shareholders have yet to decide whether to accept its offer.

Contested takeover battles are rare in Germany and Suzlon's determined bidding and final victory, which may have reflected Indian companies' growing emergence as powerful global players, may also have led to fears of jobs being transferred to India.

In an attempt to counter such fears of jobs being eliminated in Germany, Suzlon pledged to build a global wind technology centre in Hamburg in its bid. Moreover, Suzlon also said it was committed to developing REpower's offshore wind business in Europe.