Areva's fresh bid takes wind out of Suzlon’s sails
Shares of Suzlon Energy, which were up 4% in the morning, closed at Rs 1,019.7 (down 2.5%). The fall came after Areva, Suzlon’s rival for acquisition of German RE Power, put in a fresh bid at 140 euros/share.
By Amit Bhandari & Ravi Ananthanarayanan, TNN |
Shares of Suzlon Energy, which were up 4% in the morning, closed at Rs 1,019.7 (down 2.5%). The fall came after Areva, Suzlon’s rival for acquisition of German RE Power, put in a fresh bid at 140 euros/share.
The stock market seems to be betting that Suzlon will also revise its bid for RE Power, the German wind energy player. When Suzlon had made its first bid for RE Power at 126 euros, its shares had been battered down almost 10%.
With the latest development in the takeover bid for RE Power, it perhaps makes sense for Suzlon to walk away from the deal. Areva’s new bid values RE Power at $1.5 billion — any new bid by Suzlon will have to be at some premium to this.
RE Power may be worth more to Areva than to Suzlon. The European company is trying to gain a footprint in the renewable energy business, by acquiring RE Power.
Global warming concerns are strong in Europe and a number of large energy companies based there are going green, or trying to be seen as doing so. Oil majors BP and Shell are prime examples and Areva’s acquisition move is part of this trend.
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Suzlon has already created manufacturing units in China and US for a fraction of what it will have to spend on RE Power. Perhaps the company may be better off in the longer run, following the same approach in the European markets too.Start a SIP with as low as ₹500 with ET Money App!
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