Chinese Takeover or Partnership for Vestas?
Vestas Wind Systems A/S and 1,700 Colorado employees could see a takeover bid by one of the two largest Chinese wind manufacturers:
Danish newspaper Jyllands-Posten, citing unnamed sources, reports that Sinovel Wind Group and Xinjiang Goldwind Science & Technology, the No. 1 and 2 Chinese wind-turbine makers respectively, have discussed takeover bids with bankers.
Reuters, in a report Monday, quoted an analyst as saying that both companies are state-backed and have adequate financial capacity to acquire Vestas.
“Vestas would be a strong acquisition target for either Sinovel or Goldwind,” Keith Li, analyst at CIMB research, told Reuters.
Aarhus, Denmark-based Vestas (DK: VWS) — facing stiff competition from China and slackening demand in debt-plagued Europe — has seen its share value sink more than 50 percent since October. It posted a bigger-than-expected 2011 loss of $218.4 million.
Vestas stock soared on the news of the possible Chinese acquisition.
Other analysts, citing the difficulty of a purchase of the company by either of its two Chinese competitors, point to a potential partnership instead.
It’s unclear what effect the news will have on Vestas’ push for an extension of the wind production tax credits or the support for such a push in Congress, especially from Colorado’s delegation, should the company become wholly or partly owned by Chinese companies and possibly the Chinese government.