Hansen Transmissions' turnover in 2005 was EUR 213 million. Suzlon paid EUR 465 million for Hansen, more than double its annual revenues. The price sets a new standard in the wind power industry. It is around 50% higher than the sums paid for rotor blade manufacturer LM Glasfiber and turbine maker Bonus Energi, two of the big companies to have most recently changed hands. The price also rewards Hansen's owner, Allianz Capital Partners, handsomely for its purchase of the gearbox maker for EUR 132 million just two years ago and subsequent investment in the firm's increased production capacity. It was the first major takeover by Allianz's wind energy team.
Allianz is not revealing who responded to its invitation to bid for Hansen, but Suzlon's offer was apparently accepted before the bidding process came to a close. Vestas CEO Ditlev Engel declines to comment on whether Vestas was a bidder. Among other likely contenders were GE Energy and Gamesa. Like Vestas, Gamesa is heavily dependent on gearboxes from Hansen. Unlike Vestas, however, Gamesa makes a large proportion of its gearboxes in-house. In 2001 it bought Spanish gearbox maker Echesa SA, at the time a supplier to Spanish Made wind turbines, a unit of Endesa bought by Gamesa in 2003.
Hansen produces gearboxes for 3600 MW of wind turbines a year, around 30% of the global market. Winergy supplies about half of the remainder, with a series of smaller companies making up the difference (Windpower Monthly, November 2005). To date Hansen has been the only gearbox maker that could equip Vestas' 3 MW turbine -- the company's flagship model and an increasingly popular choice for customers the world over, with orders secured in the past half year for projects in Italy, New Zealand, Australia, Portugal and Greece.
"Vestas does not expect that the transfer of shares will change anything in relation to the existing agreements and day-to-day deliveries," says Engel. Suzlon confirms that supplies to Vestas are secure for 2006 and 2007. "Hansen has a healthy order book position for the next two years," says business development director, Girish R Tanti.
According to Suzlon chairman and managing director, Tulsi Tanti, neither Vestas nor Gamesa need fear for their gearbox supply. "Hansen will continue to run on its own business model, remain committed to its present customers and Suzlon will just be another customer when and if the need arises. Our objective is not to disturb the present system," he says. Hansen was purchased purely as a good investment and not as a captive supplier for Suzlon, according to Tanti.
"We see the wind industry growing worldwide and immense opportunities in the growth for Hansen. Capacity should not become a bottleneck in growth," says Tanti. Expansion of Hansen's Belgian manufacturing capacity is going ahead as planned to bring annual production to gearboxes for 4600 MW of wind capacity.
Suzlon will not be entirely reliant on Hansen gearboxes. It currently has an exclusive agreement with Winergy's factory in Chennai, a commitment it plans to keep in place for India. "We have decided we will continue to get a certain quantity from Winergy and surplus requirements from Hansen, Belgium, or might consider at a later stage to set up a plant in India." That plant, however, would function as an independent gearbox producer with sales to the entire wind industry. If customer demand justifies it, Tanti will also consider setting up a division of Hansen in China, particularly in view of Chinese requirements that 70% of a wind turbine be manufactured locally.
Despite his reassurances to Hansen's existing customers, Tanti does not attempt to hide the strategic importance of Suzlon's purchase. "The acquisition of Hansen gives us a technological leadership and will make Suzlon a leading integrated wind turbine manufacturer," he says. It will allow Suzlon to "integrate gearbox technology into the total turbine solution."
Hansen, founded in 1923, makes gearboxes in Belgium. It has sales, service and assembly centres in the UK, US, South Africa and Australia and employs 1200 people. As well as wind turbine gearboxes it makes 3000 industrial gearboxes a year. "Hansen's strong presence in the industrial gearbox market is also an important dimension of the business and we see a good opportunity to strengthen it further," says Tanti.