| Videos | Channels | Search |
Vestas wind turbine venture "better deal for Mitsubishi"
Danish wind turbine producer Vestas Wind Systems and Japanese Mitsubishi Heavy Industries (MHI) have agreed to form a joint venture in a bid to gain a bigger position on the offshore wind turbine market.
Vestas said: "The joint venture 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."
But according to Peter, this is not a good deal for Vestas. The plan is for MHI to inject EUR 100 million in cash and a further EUR 200 million. Equity ownership ratios in the new joint venture will be 50 percent each for MHI and Vestas, with an option for MHI to increase its stake to 51 percent in April 2016.
Peter says that “Mitsubishi will have paid 7.5% of Vespas total market capitalisation to get a potential majority stake in the future of the wind industry - so we don't understand why Vestas sold out so cheaply.”
Vestas shares were up 12 percent on the news. But Peter warns the markets are "overreacting" and that it should be trading almost 50 percent lower than what it is now.”
01:17 minutes
Tags: energy sector, equities, equity, equity market, markets, mhi, mitsubishi heavy industries, offshore, offshore wind turbine, peter garnry, saxo bank, saxo tv, shares, trade idea, tradingfloor.com, vestas, vestas share price, vestas wind system, wind industry, wind turbine market