How the Acciona takeover will help Nordex depend less on Europe

Senvion stuttered with delays in project execution, ultimately resulting in its insolvency, but Nordex has sourced additional funding by offering more shares to Acciona to retain its liquidity.

Acciona's turbine technology has helped Nordex gain ground in non-European markets such as Brazil
Acciona's turbine technology has helped Nordex gain ground in non-European markets such as Brazil

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With increasing competition among OEMs, and the seeming downfall of its compatriot, what would a full takeover by the Spanish energy firm mean for Nordex?

Acciona will launch a full takeover of Nordex after increasing its majority share in the German turbine manufacturer to 36.27%.

Under German law, any shareholder that acquires a controlling stake of more than 30% in a company must launch a public offer for the outstanding shares.

Nordex exclusively offered additional shares to Acciona at €10.21/share in the private placement in order to raise an extra €99 million to increase its solvency, in part as a response to Senvion’s troubles.

"The private placement enables Nordex to deliver its backlog without being hindered by balance sheets and the volatile market dynamics resulting from the Senvion insolvency," said Raimundo Fernández-Cuesta, global director of markets and investor relations at Acciona.

The capital increase that triggered the Acciona offer "provides additional equity to deliver on the strong order momentum" for the Delta 4000 platform, said Nordex, which had a total order backlog of more than €7 billion for the product at the end of June.

As a result, Acciona has now reached the 30% threshold, sparking the public offer for the remaining Nordex shares.

It intends to offer €10.32/share — equivalent to the average price over the past three months — in early 2020.

The merger of Acciona and Nordex in 2016, when Acciona acquired a 29% stake, made a material difference to the OEM’s order totals, securing the company’s future in the increasingly competitive world.

Order intake grew from 1.34GW in 2014 to 4.75GW in 2018. In the first nine months of 2019, a further 4.74GW has been ordered at Nordex.

Europe is responsible for 45% of Nordex order so far this year, down from more than 80% in 2014. Meanwhile, business in the US grew to 34% from around 11% in 2014.

While this in-part shows the diversification of the wind market, it also shows how much penetration into new markets Acciona’s turbine technology has given Nordex.

Indeed, the North American market became Nordex’s most active segment in terms of installations in 2018 (see chart).

With full backing from Acciona, it is expected Nordex will be able to fully exploit these new markets.

"For Nordex to continue this momentum and compete with larger peers, it is critical to have access to additional capital and financial strength. Acciona Energy’s full ownership will aid Nordex in this respect," noted Shashi Barla, principal analyst at Wood Mackenzie Power & Renewables.

Effect of Germany’s slump

The ripples of Senvion’s insolvency and Germany’s market paralysis are stretching far and wide. Both Nordex and Senvion have suffered from their dwindling home market.

In the country’s 11 onshore wind auctions between May 2017 and September 2019, Nordex secured an 11% market share, while Senvion won just 7.5% of the total.

By comparison, Enercon clocked up 36% and Vestas 33%.

With Acciona’s backing, Nordex is able to diversify further in a bid to avoid overreliance on a single market.

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