Study of the Suzlon-Hansen Merger

3672 words 15 pages
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
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Decreasing rotor weight per kW leads to a reduction in the weight of the hub and in the weight of the tower. As a result, the overall capital cost of a wind turbine has fallen from EUR1150/kW in 1997 to EUR760/kW in 2004. The industry expects the price per kW to continue to decline further in the future. As a rule of thumb, manufacturers expect production cost of wind power to decline 3-5% for each new generation of wind turbines they add to their product portfolio. In addition to this, equipment manufacturers are evaluating commercial viability of introducing rotor blades using carbon fiber.

MARKET POTENTIAL OF WIND ENERGY
With the economic viability of a WTG having been enhanced by the current regulatory and economic situations, availability of wind resources becomes a key factor for industry growth. A number of assessments confirm that the world's wind resources are available and distributed across almost all regions and countries. The total available resource that is technically recoverable is estimated to be 53,000 Terawatt hours (TWh)/ year. This is more than twice the projection for the entire global electricity demand in 2020.

Value Chain of the industry
The value chain analysis of wind power generation industry is below in the diagram. Suzlon not only provides design, wind mill components and installation services, but also operates and maintains the installations.

Critical success factors
Wind energy project sector
CSF Suzlon competencies
Technology

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