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Siemens Gamesa closes asset deal with Senvion

Siemens Gamesa is paying approximately EUR 200 million for Senvion assets including a large turbine blade factory, thereby securing 2,000 jobs.

Photo: Siemens Gamesa/Marina Pacheco

After a period of delay, Siemens Gamesa and Senvion have reached an agreement, by which the German-Spanish OEM is buying the insolvent company's European service business, Senvion's intellectual property rights as well as a turbine blade factory in Vagos, Portugal, thereby securing roughly 2,000 jobs. Senvion informs in a statement, while Siemens Gamesa reveals the purchase price of EUR 200 million.

"We are pleased that we have been able to give our colleagues in a large part of the European Onshore Services business and in our blade production facility in Portugal positive news today, securing close to 60 percent of all jobs for now. Siemens Gamesa will be a safe new home for them. We are also confident that this a good solution for our service customers," writes Senvion Chief Executive Yves Rannou.

Danish blade factory dismissals

The two parties have been engaged in conclusive talks throughout this last month, however, the public has not been privy to precisely which assets were being negotiated, as Siemens Gamesa had only disclosed that it was interested in Senvion's "profitable" business divisions.

Even so, that the deal would entail the service business could be readily inferred. The agreement entails that Siemens Gamesa is taking over service contracts for 8.9 GW, bringing the company's combined portfolio up to 69 GW. But that the deal should also include the massive production facility and its 1,400 workers at the Portuguese plant, which manufactures all Senvion's blades, has been less obvious.

During negotiations, Siemens Gamesa did reduce its own blade production, however, and also closed its onshore wind turbine division in Denmark and dismissed 600 employees from the Aalborg blade factory. At the time, the company insisted that this move had no relation to the Senvion deal.

"No, it has no relation whatsoever to Senvion. It is due to challenged onshore wind market conditions. And we are obliged to adjust our setup, which is also why we announced our decision two years ago about choosing to use a single technology, for which we selected a geared technology for onshore wind," said Siemens Gamesa Offshore Wind Chief Executive and Danish Country Head Andreas Nauen at the time.

Less dependent on Asia

In Monday’s announcement, Siemens Gamesa also writes that the blade factory purchase will reduce dependency on deliveries sourced from Asia rather than from Northern Denmark – an announcement clearly tied to US trade restrictions on Chinese goods including turbine blades for US wind turbines.

"Bringing Senvion's service assets on board will help us to drive growth in a key market segment and add important capacity in Germany and other important European markets, while the blade factory helps us mitigate the risk in the difficult trade environment. We're bringing good people and good business into the company and that's a win for all parties," writes Siemens Gamesa Chief Executive Markus Tacke in a press release.

The transaction is still pending necessary approvals from authorities, which Siemens Gamesa expects granted before March 2020, while Senvion forecasts finalization before the end of this year.

Further sales

Senvion has already started to shut down its other business units, largely entailing wind turbine production in Germany as well as management, meaning the termination of more than 1,000 jobs toward the end of the year.

Two other assets remain: The extensive service division outside Europe and the Indian business, which was spun off as an independent operation in August, for which "explorative talks with potential investors continue," Senvion writes in its statement.

"I sincerely thank everyone who made Senvion what it was for decades: a pioneer in the provision of clean power to the world. We will now continue our efforts to pursue potential options for other business parts to find solutions for as many employees as possible," Rannou writes.

English Edit: Daniel Frank Christensen

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