Vestas Wind Systems and Mitsubishi Heavy Industries (MHI) have signed an agreement that will see Vestas acquire MHI’s shares in the MHI Vestas Offshore Wind
At the same time, MHI will acquire 2.5% in Vestas and be nominated to a seat on Vestas’ board of directors, strengthening the partnership within sustainable energy between the two companies.
Vestas is to acquire MHI’s 50% share of the MHI Vestas Offshore Wind joint venture against 5,049,337 shares in Vestas that will be issued at closing of the transaction, corresponding to 2.5% of Vestas’ nominal share capital after the capital increase.
The transaction has a value of approximately €709M (US$832M), based on the volume-weighted average of the price for shares in Vestas as quoted on Nasdaq Copenhagen the last five days up to and including 28 October 2020.
In a statement, the companies said, “Through the strengthened partnership, Vestas is making an emphatic long-term move in offshore wind energy to become a leading player in offshore wind by 2025.
“A new offshore wind turbine platform will also be imminently introduced to improve efficiency and drive the levelised cost of energy down further.
“The companies also aim to meet customer needs across a wider range of the value chain and increase their global leadership in sustainable energy solutions. To that end and underlining the long-term goal of the agreement, Vestas and MHI will also plan to collaborate in green hydrogen and a joint venture in Japan to secure accelerated growth for onshore and offshore wind energy.”
Vestas group president and chief executive Henrik Andersen said, “Vestas is the leader in onshore wind, but to accelerate the energy transition and achieve our vision we must play a larger role in offshore wind.
“I am excited that Mitsubishi Heavy Industries shares Vestas’ vision to become a leading player in offshore wind energy in the long term and will strengthen our partnership by becoming a large shareholder and part of Vestas’ Board of Directors.
“Offshore wind is key to creating a sustainable planet for future generations and offers unique growth potential.”
MHI president and chief executive Seiji Izumisawa said, “We are very pleased to be able to expand our co-operation and collaboration with Vestas. We will continue to strengthen co-operation by leveraging our respective strengths to support the growth of clean energy around the world, especially in Japan.”
In Japan, the two companies will establish a joint venture for onshore and offshore wind turbines and Vestas will, as part of the collaboration, plan to establish parts of its regional supply chain and production in Japan should market volume and cost-competitiveness allow.
Mr Andersen continued, “On behalf of Vestas, I look forward to welcoming Kentaro Hosomi, chief executive, energy systems at MHI to our board of directors. We hope to benefit from his visionary and strategic mindset as we seek to create a more sustainable planet for future generations”.
Subject to completion of the transaction, the share capital of Vestas will be increased by a nominal value of Dkr5,049,337 (US$795,876), divided into shares of Dkr1 each. If the transaction is approved by the competition authorities, MHI will, through MHI Holding Denmark (MHI Denmark), subscribe for nominally Dkr5,049,337 new shares, divided into shares of Dkr1 each, by contribution in kind of MHI Denmark’s shares in the MHI Vestas Offshore Wind.
The new shares shall be subscribed at a price of Dkr1,045 per share of nominally Dkr1, calculated as the volume-weighted average of the price for shares in Vestas as quoted on Nasdaq Copenhagen A/S the last five business days open for trading up to and including 28 October.
Subscription and payment of the new shares will be made by MHI Denmark at the date of completion of the transaction, but no later than 12 months after the date of the decision by the board to issue the shares.
Vestas is subject to certain obligations to offer MHI Denmark rights to subscribe for shares against cash payment in the event of a rights issue to shareholders in the period until closing of the transaction to ensure that any changes to the size of the nominal value of Vestas shares do not subsequently impact MHI Denmark’s proportionate holdings.
Planning for integration of the offshore wind joint venture into the Vestas group will commence immediately and run until transaction closing, focusing on synergies in sales, technology, manufacturing footprint and procurement to sustain customer relationships, lower costs and build a strong shared Vestas culture.
In a related development, MHI and Vestas have appointed Johnny Thomsen as chief executive of MHI Vestas Offshore Wind, taking over from Philippe Kavafyan, who has left the company after two and half years as chief executive.
Until transaction closing, the executive management of MHI Vestas Offshore Wind will consist of Johnny Thomsen, chief executive of MHI Vestas Offshore Wind, Tatsuichiro Honda, co-chief executive officer and chief financial officer of the company, Kentaro Hosomi, deputy chairman of MHI Vestas Offshore Wind and chief executive, energy systems, MHI, and Henrik Andersen, chairman of MHI Vestas Offshore Wind group president and chief executive of Vestas.
On a stand-alone basis, MHI Vestas Offshore Wind is expected to report a consolidated revenue for 2020 of approximately €1.4Bn, with an EBIT margin of around 4%.
Closing of the transaction is expected to take place in either Q4 2020 or Q1 2021.
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