GE buys Danish wind turbine maker for $1.65bn

The acquisition brings in-house a turbine blade designer and manufacturer as GE ramps up its renewable energy business.

General Electric has purchased LM Wind Power for $1.65 billion, adding turbine rotor manufacturing to its renewable energy business.

The move brings turbine manufacturing in-house for GE, which has built a $9 billion renewables business – GE Renewable Energy – that has installed more than 370GW around the world.

Doughty Hanson, a London-based private equity firm, agreed to sell Denmark-based LM Wind Power for 8.3 times pro forma EBITDA. The transaction is subject to regulatory approval and is expected to close in the first half of 2017.

The cost to generate renewable energy is falling, and GE is trying to simplify the development pipeline and claim a greater stake in the industry. “We'll be more local, have more flexibility and knowledge in turbine design and supply, and more ability to innovate and reduce product costs, while improving turbine performance,” GE Renewable Energy president Jérôme Pécresse said.

Marc de Jong, chief executive at LM Wind Power, added: “Our two organisations are highly complementary, and the transaction positions us well to respond faster to customer needs and enhance performance of wind turbines to ultimately reduce the cost of energy.”

LM Wind Power began operations in 1978 and has produced over 185,000 turbine blades, equaling approximately 77GW of wind capacity. It has 13 factories located in Denmark, Spain, Poland, Canada, the US, India, China and Brazil.

In 2015, almost 50 percent new energy capacity came from renewable energy sources. GE has recently focused its business in Europe on offshore wind development. It has also been active in emerging markets, especially in Southeast Asia. Earlier this year it agreed with Vietnam's Ministry of Industry and Trade to increase the country's wind generation, and last month started a partnership with Mainstream Renewable Power to develop 1GW of wind projects there.