By Sandrine Rastello, Bloomberg
Paris: Areva SA, the world’s largest manufacturer of nuclear power plants, abandoned its bid to acquire German wind-turbine builder Repower Systems AG, saying the price was too high.
Paris-based Areva will keep its 30% Repower stake for the time being. Areva was competing with Suzlon Energy Ltd. to buy Repower and had until 26 May to top Suzlon’s 1.2 billion-euro ($1.6 billion) bid.
In addition to price concerns, Areva said the limited time available for a counter-offer meant it was unlikely to win a majority stake. It also said its initial investment in the company had been multiplied by four.
Repower shares rose as high as 168 euros earlier today, before coming back to close at 149.70 euros.
Pune, western India-based Suzlon, wants to expand in Europe. Last month it bought a 7.7% stake in Hamburg-based Repower and offered 150 euros a share for the rest of the shares. That’s 19% more than its previous offer and a 7% premium to Areva’s offer. The French company rejected a call by Suzlon Chairman Tulsi Tanti to run the company jointly.
Suzlon expects “to extend our relationship with Areva in areas of transmission and distribution where they have global leadership,” Tanti said in a separate e-mailed statement today.
Areva signed a cooperation agreement with Suzlon guaranteeing a profit of “more than 350 million euros” if it decides to sell its Repower shares and agreeing to be Suzlon’s preferred supplier for electricity transmission and distribution.
The Areva announcement came after the close of trading in Paris. The company’s investment certificates, which are publicly traded, fell 4.72 euros, or 0.6% , to 754 euros. Suzlon shares rose Rs3.6, or 0.3%, to Rs1,158.9 on the Bombay Stock Exchange.