Vestas, Mitsubishi in talks over wind deal

E&E • Posted: Thursday, August 30, 2012

A strategic tie-up between Mitsubishi Heavy Industries Ltd. and Vestas Wind Systems could help the struggling Danish wind turbine producer regain its financial security, Vestas said yesterday.

The world’s biggest wind turbine maker has been facing sharp losses, fueling speculation the company may issue new shares or be bought out entirely. Yesterday, share prices rose 19 percent after news of the two companies’ talks.

“No matter what the deal contains, it will surely include an injection of capital to Vestas,” said Michael Friis Jorgensen, an analyst for Alm. Brand Markets.

Increasing costs, huge overcapacity and an over-budget turbine project are just a few of the issues plaguing the company. Last year Vestas fell into the red, and the first half of this year saw a $200 million net loss and 7 percent rise in debt. The company has fired 3,700 staff, about 17 percent of its workforce.

Talks between the two companies were confirmed by a Mitsubishi representative, who would not comment further. A potential collaboration could be beneficial for Mitsubishi in pursuing offshore wind power in Europe, analysts said.

“I don’t see a full takeover. It wouldn’t be interesting to Vestas or its shareholders. It’s very conceivable that Mitsubishi could take a stake in Vestas and become a passive shareholder, but the most likely scenario, I believe, is the offshore wind-turbine partnership,” said Jacob Pedersen, an analyst with Sydbank (Flemming Emil Hansen, Wall Street Journal [subscription required], Aug. 29). — HP