Vestas Wind Systems and Mitsubishi Heavy Industries have signed an agreement to expand their partnership in sustainable energy. The strengthened partnership entails that Vestas will acquire MHI’s shares in the MHI Vestas Offshore Wind (MVOW) joint venture, and MHI will acquire 2.5 % in Vestas and be nominated to a seat in Vestas’ board of directors.
Vestas sees this as making an emphatic long-term move in offshore wind energy to become a leading player in offshore wind by 2025 and to expand the two companies’ overall leadership in sustainable energy. It plans to introduce very soon a new offshore wind turbine platform with improved efficiency, able to drive the levelised cost of energy further down. Vestas and MHI will also plan for collaborating in green hydrogen as well as a joint venture in Japan to secure accelerated growth for onshore and offshore wind energy.
In Japan, the two companies will establish a joint venture for sales of onshore and offshore wind power turbines and Vestas will, as part of the collaboration, plan to establish parts of its regional supply chain and production in Japan should market volume and cost-competitiveness allow.
The demand for offshore wind energy has accelerated in recent years and is expected to reach around 25 GW per year by 2030. This development is driven by a 67 % decline in levelised cost of offshore wind energy since 2012 and the growing applicability of offshore wind energy, which is mainly driven by high system value, proximity to load centres, better permitting and public acceptance, as well as large-scale Power-to-X solutions, ,an area in which MHI has particular expertise and can contribute to across the value chain.
Through the agreement, the two companies seek to accelerate their overall growth by integrating onshore and offshore platforms and exploiting Vestas’ strengths in both segments. Specifically, this entails a stronger integration between onshore and offshore technology and modular frameworks.
Vestas’ planning of the expected integration of MVOW into the Vestas group will commence immediately and run until the transaction closes, focusing on synergies in sales, technology, manufacturing footprint and procurement to sustain customer relationships, lower costs and build a strong shared Vestas culture.
On a stand-alone basis, MVOW is expected to report a consolidated revenue for 2020 of approximately EUR 1.4bn, with an EBIT margin of around 4 %.
As part of the agreement, Vestas will acquire MHI’s 50 % share of the MHI Vestas Offshore Wind (MVOW) joint venture against 5 049 337 shares in Vestas that will be issued at closing of the transaction, corresponding to 2.5 % of Vestas nominal share capital after the capital increase. The transaction has a value of approx. EUR 709 million.
Closing of the transaction is expected to take place within either the fourth quarter of 2020 or the first quarter of 2021.