Germany

Germany

Dominant gear supplier sold

German engineering giant Siemens has strengthened its hold on the wind hardware market by acquiring gear system manufacturer Flender Holding, the parent company of leading wind turbine drive system supplier Winergy. The EUR 1.2 billion acquisition comes six months after Siemens entered the wind business as a wind turbine manufacturer with its takeover of Denmark's Bonus Energy.

Delivering around 2500 gear box units to the wind industry annually, Winergy has around 40% of the market for turbine gear boxes. Winergy's annual turnover is around EUR 0.3 million, contributing around 30% to Flender's total sales of EUR 1.012 billion for the year ending March 31, 2004. Around 80% of Winergy's production is based in Germany at Friedrichsfeld near Voerde, with the rest based in the US.

"We see no problem," with the fact that after the takeover Flender will supply gear units for Siemens turbines as well as to most other turbine manufacturers around the world.

Alexander Machowetz of Siemens Automation and Drives, the division which will absorb Flender, sees "no problem" in the company supplying an important component also to the competitors of its wind turbine division. "We are ready and willing to supply to all Flender customers in the wind and other sectors with the usual quality. There will be no exceptions," he assures. "The whole customer spectrum will profit from our technical strength while maintaining complete protection of confidential company information."

Siemens' EUR 1.2 billion bid for Flender, owned by Citigroup Venture Capital Equity Partners in London, beat off several international investment firms, reportedly including private equity companies Carlyle Group and BC Partners. The takeover still requires approval from the European cartel authority, which Machowetz hopes will be granted within the year. "Until then we must treat Flender as a competing company and hold off with strategic decisions," he says, declining to comment of whether the Winergy trade name will be retained.

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