Vestas and Mitsubishi Heavy Industries have agreed to form a joint venture dedicated to offshore wind energy
Currently, the main markets for offshore wind turbines are the North Sea coastal countries, particularly the UK and Germany. In these and all other markets, today, measures are being taken to support the introduction of wind power generation equipment to supersede outdated coal-fired and nuclear plants, and solid growth in this area is expected to continue going forward. The establishment of the agreement between Mitsubishi and Vestas is the two partners’ joint response to this market’s growth potential.
The JV will combine Vestas’ and Mitsubishi’s current capabilities within offshore wind turbines, Vestas will transfer the development of the V164-8.0 MW, the V112 offshore order book, existing offshore service contracts and approx 300 employees to the JV. Mitsubishi will inject EUR 100m in cash into the venture and will inject another EUR 200m based on certain milestone achievements reflecting the natural early product life cycle of the V164 turbine.
As part of the JV, it has been agreed between the parties that Vestas is contracted to finalise the planned development of the V164-8.0 MW on behalf of the JV. In addition, Vestas and Mitsubishi will provide various services to the partnership. The Venture will start its business with the current V112 offshore and the V164-8.0 MW turbines. At a later stage, they will explore the possibilities of integrating the MHI hydraulic DDT technology into the 8 MW platform which would make the JV positioned to offer a product line-up variety that best suits customer demands.
The two companies are confident that this new collaboration will be well-positioned to win an expanding share of the offshore wind turbine market and become a global leader in this attractive and high-growth market.
The head office of the new venture will be located in Aarhus, Denmark, from where the company will handle all aspects from design, further development, procurement and manufacturing related to the V164-8.0 MW turbine as well as all marketing, sales and after-sales service related to offshore wind. Vestas will continue to manufacture and supply the V112 turbines which the JV will offer for offshore projects.
Masafumi Wani will become Chairman of the Board of Directors (Executive Senior Vice President and Head of Power Systems of MHI), Anders Runevad Vice Chairman (Group President & CEO of Vestas) and Jens Tommerup CEO of the JV (currently President of Vestas Asia-Pacific & China). Equity ownership ratios will be 50 per cent for each of MHI and Vestas with an option for MHI to change the ownership ratio to 51 per cent for MHI and 49 per cent for Vestas in April 2016.
The transaction is subject to customary closing conditions including approval from relevant competition authorities in Europe and Asia and closing are expected to take place around the end of March 2014.