Study of the Suzlon-Hansen Merger
Suzlon Hansen Merger
Contents
SUZLON 3
HANSEN TRANSMISSION 4
INDUSTRY ANALYSIS 4
Wind energy at an inflexion point 4
MARKET POTENTIAL OF WIND ENERGY 4
Value Chain of the industry 4
Critical success factors 4
Wind energy project sector 4
Industrial and wind turbine gearbox manufacturing 4
STRATEGIC INTENT 4
SUZLON 4
Suzlon competitive strengths 4
Risks and concerns 4
Strategic Intent of the acquisition for Suzlon Energy 4
Strategic Intent of the acquisition for Hansen Transmissions 4
Congruence in Intent 4
Synergy Benefits 4
Deal Structuring 4
Post merger integration 4
Organization structure of SEL after reorganization 4
Assessment of the Deal 4
References 16
SUZLON
Suzlon Energy Ltd (Suzlon), promoted by the Tanti family in 1995, is India's largest and world's sixth largest supplier of Wind Turbine Generators (WTGs) , with proven technical and execution capabilities to offer end-to-end solutions. Suzlon's core business comprises of development, manufacture, sale and maintenance of wind power systems. Suzlon was quick to realize that in an industry where customer purchases are driven by project IRR (and not by product differentiation); cost leadership was paramount to profitability. To achieve this, Suzlon has built a functionally diversified business model that seeks to pool together best resources in each region to deliver world-class products at competitive price.
Figure 1 - Suzlon Business Portfolio
History
Incorporated in 1995 by Textile manufacturer Mr. Tulsa Tanti.
Entered into no. of technological collaboration with no. of German companies & Wind energy division of Enron etc. And entered into different markets through no. of wholly owned subsidiary till 2005. Established R&D centers in Netherlands and USA through small acquisitions.
2005 went public and was oversubscribed.
2006, first major acquisition of HTI ensuring vertical integration for its end to end solution provider vision.
2007 acquired
Contents
SUZLON 3
HANSEN TRANSMISSION 4
INDUSTRY ANALYSIS 4
Wind energy at an inflexion point 4
MARKET POTENTIAL OF WIND ENERGY 4
Value Chain of the industry 4
Critical success factors 4
Wind energy project sector 4
Industrial and wind turbine gearbox manufacturing 4
STRATEGIC INTENT 4
SUZLON 4
Suzlon competitive strengths 4
Risks and concerns 4
Strategic Intent of the acquisition for Suzlon Energy 4
Strategic Intent of the acquisition for Hansen Transmissions 4
Congruence in Intent 4
Synergy Benefits 4
Deal Structuring 4
Post merger integration 4
Organization structure of SEL after reorganization 4
Assessment of the Deal 4
References 16
SUZLON
Suzlon Energy Ltd (Suzlon), promoted by the Tanti family in 1995, is India's largest and world's sixth largest supplier of Wind Turbine Generators (WTGs) , with proven technical and execution capabilities to offer end-to-end solutions. Suzlon's core business comprises of development, manufacture, sale and maintenance of wind power systems. Suzlon was quick to realize that in an industry where customer purchases are driven by project IRR (and not by product differentiation); cost leadership was paramount to profitability. To achieve this, Suzlon has built a functionally diversified business model that seeks to pool together best resources in each region to deliver world-class products at competitive price.
Figure 1 - Suzlon Business Portfolio
History
Incorporated in 1995 by Textile manufacturer Mr. Tulsa Tanti.
Entered into no. of technological collaboration with no. of German companies & Wind energy division of Enron etc. And entered into different markets through no. of wholly owned subsidiary till 2005. Established R&D centers in Netherlands and USA through small acquisitions.
2005 went public and was oversubscribed.
2006, first major acquisition of HTI ensuring vertical integration for its end to end solution provider vision.
2007 acquired
References: (7) Thomson Street Investments Conference Call transcript, July 26, 2007 (Source: ISI emerging markets) http://site.securities.com/doc_pdf?pc=IN&doc_id=118579794 (8) Suzlon Energy Limited Investors presentation , Nov 2007 (9) http://sify.com/finance/fullstory.php?id=14558450 accessed on Nov 11, 2007 (10) http://cbeonline.wordpress.com/2007/05/16/hansen-transmission-to-start-unit-in-coimbatore/ accessed on 27th Nov