Smart Energy Finances: Siemens Energy takes full control of Siemens Gamesa

Leading this week’s Smart Energy Finances is the announcement of Siemens Energy’s acquisition of the remaining 2.21% shares in Siemens Gamesa, marking the consolidation of its prior 98% in the struggling renewables company.

Also on the radar are Ofgem’s calls to prospective investors looking to bid for £7 billion ($8.8 billion) worth of offshore transmission assets set to be auctioned off in two bidding rounds in 2024 and 2025.

And looking to focus on its regulated businesses, US energy giant Duke Energy has announced the sale of its unregulated utility-scale renewables business for $2.8 billion to strengthen its balance sheet and avoid additional holding company debt issuances.

Siemens Energy has fully acquired Siemens Gamesa

The announcement came earlier this week when Siemens Gamesa minority shareholders approved a capital reduction for the remaining 2.21% of shares not held by Siemens Energy, paving the way for full integration of both companies.

Upon completion of the transaction, Siemens Energy will have spent a total of €4.05 billion ($4.4 billion) to acquire all shares not previously owned.

Siemens Energy initially announced the bid to secure all remaining shares of Siemens Gamesa in May 2022, which concluded December the same year.

Following a sustained purchase order, Siemens Energy held 98% of shares, with this latest capital reduction bringing it to 100%.

“This is an important step in preparing for full integration. Besides, the turnaround programme at Siemens Gamesa, Mistral, needs further rigorous execution, even though we see first moves in the right direction,” said Christian Bruch, CEO and president of Siemens Energy and chairman of Siemens Gamesa.

The transaction has mostly been financed with equity.

With the integration, shareholders will receive compensation of €18.05 ($19.50) per Siemens Gamesa share, the same price that was offered in the original tender offer by Siemens Energy in 2022.

Siemens Gamesa ended the challenging fiscal year 2022 with what they called a “record backlog” and last month announced the divestment of wind tower manufacturer Windar Renovables.

Smart Energy Finances: Siemens Gamesa divests Windar

Ofgem calls to bidders for £7 billion in offshore transmission assets

Britain’s energy regulator Ofgem has put out a call to prospective investors looking to bid for £7 billion worth of offshore transmission assets.

Around 10 Offshore Transmission Owner (OFTO) assets, comprising prebuilt transmission connections for offshore wind farms, and providing guaranteed returns for 25 years subject to availability targets being met, will be going under the hammer.

The OFTO regime has operated for 11 years, having brought investment in for 24 assets, with more currently going through the process.

The regime ensures compliance with competition laws that mean the offshore wind farm developer may not own the associated transmission link once the wind farm is operational.

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Its design means that the windfarm developer can build the transmission connection to its own specification, with full control over timescales, then be repaid the cost of the asset when it is auctioned off. The developer can then recycle that capital into further developments.

According to Ofgem, the next two years will see a surge in OFTOs coming to market, reflective of the UK Government’s ambitious target of increasing offshore wind generation capacity fivefold to 50GW by 2030.

Bids will be assessed by Ofgem with offshore transmission licences granted to successful bidders, in a process that usually takes one to two years.

Duke Energy sells renewables business for $2.8 billion

Fortune 500 utility company Duke Energy has announced the sale of its unregulated utility-scale commercial renewables business to Brookfield Renewable, one of the world’s largest owners and operators of renewable power and climate transition assets.

The sale values approximately $2.8 billion, according to Duke Energy, and includes non-controlling tax equity interests and the assumption of debt.

Duke Energy’s expected net proceeds from this transaction are approximately $1.1 billion.

Duke Energy will utilise proceeds to strengthen its balance sheet and avoid additional holding company debt issuances.

This will allow the company to focus on the growth of its regulated businesses, including investments to enhance grid reliability and help incorporate over 30,000MW of regulated renewable energy into its system by 2035.

The agreement includes more than 3,400MW in alternating current of utility-scale solar, wind and battery storage across the US, net of joint venture partners ownership, in addition to operations, new project development and current projects under construction.

Primary operations of the business will remain in Charlotte, N.C.

The sale is expected to close by the end of 2023.

For the latest in finance and investment announcements coming out of the energy industry, make sure to follow Smart Energy Finances Weekly.

I will also be attending European Sustainable Energy Week (EUSEW) in Brussels next week from 20 to 22 June. Will I see you there?

Cheers,
Yusuf Latief,
Content Producer
Smart Energy International

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