Vestas, Mitsubishi form wind power joint venture

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The Danish wind turbine producer Vestas Wind Systems and Japanese Mitsubishi Heavy Industries (MHI) have agreed to form a joint venture dedicated to offshore wind energy, Vestas said Friday in a press release.

Vestas will transfer the development of the V164-8.0 MW, the V112 offshore order book, existing offshore service contracts and about 300 employees to the new company.

The MHI will inject 100 million euros in cash into the joint venture and will input another 200 million euros based on milestone achievements during the process of developing the V164 turbine.

Equity ownership ratios will be 50 per cent for each of MHI and Vestas with an option for MHI to change the ownership ratio to 51 per cent for MHI and 49 per cent for Vestas in April 2016.

The head office of the new company will be located in Aarhus, the second biggest city of Denmark. Masafumi Wani, Executive Senior Vice President and Head of Power Systems of MHI will become the chairman of its Board of Directors, while Jens Tommerup, president of Vestas Asia Pacific & China, will act as the CEO.

The joint venture will explore the possibilities of integrating the MHI hydraulic DDT technology into the 8 MW platform, which would make the new firm positioned to offer a product line-up variety that best suits customer demands, said the news press.

The merger still needs to be approved by the European Union and relevant competition authorities, the finishing of the case is expected at around the end of March 2014.

Vestas said that the establishment of the joint venture will not have any impact on Vestas' annual accounts for 2013 and is only expected to have a marginal impact on Vestas' 2014 revenues and earnings due to the deconsolidation of the offshore wind division.

The news sent Vestas share price up 9.62 percent shortly after the market opened on the Copenhagen Stock Exchange at 0900 local time (0700 GMT), bringing the price per share to its highest level this year.

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