After Tata-CSN battle for acquiring Corus, Indian wind energy major Suzlon is now set to lock horns with French energy major Areva SA to acquire German wind turbine manufacturer REpower Systems.
Suzlon Energy has placed a whopping 20 per cent higher counter bid at Euro 126 per share to win the race from the French major, which has offered a cash offer of 105 euro per share.
The total deal value, according to a source at the Suzlon Energy, is expected to go up anywhere between $1 and 1.5 billion.
However, Suzlon's journey is not expected to be a smooth sailing one as Areva, the major shareholder of REpower Systems, holds nearly 30 per cent stake in the company for over a year.
Suzlon plans to foot the acquisition bill through debt and internal accruals. Analysts said that Suzlon's 'hostile' bid as against the 'friendly' one of Areva might not pay the price as the French major would receive a sound backing from the European community.
"REpower and Areva have successfully worked together in various business fields for a long time and we have also known the company as our major shareholder...Our cooperation until now has shown that Areva supports our strategy and will accelerate our future growth through their commercial and financial strength.
"This is why we believe that Areva - as one of the leading companies in the energy sector- is the right partner for us," REpower's Cheif Executive Officer Fritz Vahrenholt said at the time of receiving the bid from Areva.
Meanwhile, Suzlon Energy signed a legally binding agreement with Portugal-based company Martifier, which has a 25.4 per cent stake in REpower, to make its offer.
"The offer will be made through a Special Purpose Vehicle in which Suzlon will hold 75 per cent stake, while the remaining will be with Mertifier," Suzlon Energy's Chairman and Managing Director Tulsi Tanti said, adding the SPV could emerge as a 100 per cent subsidiary of Suzlon.
Suzlon and Martifier will seek the support of the REpower management for the offer and have a strong interest in working with REpower's existing management in the future, Tanti said, adding there would be no retrenchment.
"REpower has a great strength and we will make it more viable by making a good synergy. We will rather hire more people in future," he said.
REpower Systems is the third largest manufacturers of wind turbines in Germany having a market share of 7.6 per cent and has wind power generation capacity of 300 MW, which is expected to go up to 1,000 MW by 2008, Tanti said.
Suzlon Energy has placed a whopping 20 per cent higher counter bid at Euro 126 per share to win the race from the French major, which has offered a cash offer of 105 euro per share.
The total deal value, according to a source at the Suzlon Energy, is expected to go up anywhere between $1 and 1.5 billion.
However, Suzlon's journey is not expected to be a smooth sailing one as Areva, the major shareholder of REpower Systems, holds nearly 30 per cent stake in the company for over a year.
Suzlon plans to foot the acquisition bill through debt and internal accruals. Analysts said that Suzlon's 'hostile' bid as against the 'friendly' one of Areva might not pay the price as the French major would receive a sound backing from the European community.
"REpower and Areva have successfully worked together in various business fields for a long time and we have also known the company as our major shareholder...Our cooperation until now has shown that Areva supports our strategy and will accelerate our future growth through their commercial and financial strength.
"This is why we believe that Areva - as one of the leading companies in the energy sector- is the right partner for us," REpower's Cheif Executive Officer Fritz Vahrenholt said at the time of receiving the bid from Areva.
Meanwhile, Suzlon Energy signed a legally binding agreement with Portugal-based company Martifier, which has a 25.4 per cent stake in REpower, to make its offer.
"The offer will be made through a Special Purpose Vehicle in which Suzlon will hold 75 per cent stake, while the remaining will be with Mertifier," Suzlon Energy's Chairman and Managing Director Tulsi Tanti said, adding the SPV could emerge as a 100 per cent subsidiary of Suzlon.
Suzlon and Martifier will seek the support of the REpower management for the offer and have a strong interest in working with REpower's existing management in the future, Tanti said, adding there would be no retrenchment.
"REpower has a great strength and we will make it more viable by making a good synergy. We will rather hire more people in future," he said.
REpower Systems is the third largest manufacturers of wind turbines in Germany having a market share of 7.6 per cent and has wind power generation capacity of 300 MW, which is expected to go up to 1,000 MW by 2008, Tanti said.
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