Rivals fight it out in high stakes battle -- Gamesa and Vestas

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Spanish wind giant Gamesa is in advanced negotiations to buy Made Tecnologías, the turbine manufacturing wing of the country's top utility, Endesa. The depth of negotiations was made clear towards the end of last month when Made staff signed a manifesto stating: "The sale of Made to Gamesa involves the practical absorption by a company with a 52% market share in 2002, of its main competitor, which has a 15% share."

The statement implies that a deal with Gamesa would be the end of Made technology and would lead to layoffs. Made staff claim this is an unnecessary risk as there are other offers to consider, such as the one reportedly made by world-leading Vestas of Denmark. "Gamesa's interest in Made is [more] to do with keeping Vestas out of Spain [...] and with wiping out competition from Made," says the statement. Earlier, Gamesa had refuted press reports that a deal was imminent although the company confirmed it was in negotiations for Made. Gamesa also said its reported offer of EUR 150 million was way off the mark, though it did not specify by how much.

Vestas tight lipped

Meanwhile, Vestas remains tight-lipped. "As we reported in our annual report, we are aiming at a strategic purchase in Spain," says Vestas' Svend Sigaard, though he declines to confirm or deny that Made was the focus of attention or whether Vestas is still on track to buy a Spanish company by July. "It takes two to make a deal you know, but it is still our goal to at least have a clarification before the summer of how we can penetrate the Spanish market."

Made is being sold as part of Endesa's plan to raise EUR 6-7 billion by 2006. The revenue will go towards reducing the utility's EUR 23 billion debt. Made is also selling at least half of its renewables and cogeneration arm, Endesa Cogeneración y Renovables (Ecyr). Indeed, as part of its sales pitch, Endesa claims Ecyr was behind 18% of the country's wind power production last year and 20% of the cumulated online wind capacity, with 780 MW up and running. According to the national energy agency, however, Endesa is behind 16%.

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