Dive Brief:
- GE announced this week it will purchase Denmark-based LM Wind Power, a manufacturer and supplier of wind power rotor blades, for $1.65 billion.
- The acquisitions gives GE the ability to ensure the wind turbine blade design and manufacturing for its renewable energy business is in-house. Last year, GE produced turbines for about 40% of new wind capacity in the U.S., according to SNL.
- The deal is expected to close next year, and to be accretive to GE earnings in 2018.
Dive Insight:
GE's acquisition of LM Wind aims to speed its development of wind turbines, as it seeks to develop more of the growing resource amid declining costs. Last year, about half of all new capacity additions were renewable energy sources, with wind representing more than a third of that total.
Jérôme Pécresse, President and CEO of GE Renewable Energy, said in a statement "we’ll be more local, have more flexibility and knowledge in turbine design and supply, and more ability to innovate and reduce product costs, while improving turbine performance."
LM Wind Power has been owned by Doughty Hanson, a leading London-based private equity firm, for the last 15 years. GE said the strategic investment enhances the capabilities of its onshore and offshore wind businesses to increase output and value,
Following the merger, GE plans to operate LM Wind Power as a standalone unit within GE Renewable Energy, while retaining the ability to source blades from other suppliers. LM Wind Power will retain its existing management team and Denmark headquarters.