Siemens Gamesa sells most of India business as US buyer wins race

Siemens Gamesa will sell 90% of its wind business in India and Sri Lanka to a group of investors led by US alternative asset manager TPG, in a deal that includes the sale of manufacturing plants and a technology transfer.

TPG will be the majority shareholder, while Siemens Gamesa will retain a 10% minority stake in the transferred business. Financial details were not disclosed and the transaction is subject to regulatory approvals.

The German wind turbine manufacturer, a unit of energy technology giant Siemens Energy, as part of the deal plans to transfer about 1,000 employees and two factories in India to the new company. Siemens Gamesa will continue to support it growth through a long-term technology licensing agreement.

“India is and remains an attractive market for wind energy, with significant growth potential. However, after thorough analysis, we have determined that our new partners led by TPG are the optimal owners to harness this potential,” Siemens Gamesa CEO Vinod Philip said.

Indian media had previously reported local contenders such as Inox were also in the running for the assets.

The sale of most of its Indian wind unit came as Siemens Gamesa in recent years has accumulated heavy losses, in particular in the wake of quality problems at its 4.X and 5.X onshore wind platforms, which it temporarily stopped selling.

“The new company will serve the Indian market more effectively while also offering a long-term perspective for employees and customers.

“This ensures continued support and development in this vibrant market, while Siemens Gamesa can concentrate on other core markets.”

Siemens Gamesa said the “high-growth” Indian market is expected to add about 57GW of wind power capacity by 2032. TPG has the financial strength to tap into that, the OEM said, as well as extensive experience in the Indian market and a strong commitment to green projects globally.

The agreement allows Siemens Gamesa to shift its strategic focus to other core markets, the company added.

TPG’s investment will be made through its climate investing platform TPG Rise Climate, as the inaugural investment from its Global South Initiative (a private equity strategy launched in partnership with private climate investment vehicle Altéerra).

A significant minority investment alongside TPG will be made by MAVCO Investments, a private company belonging to the families of MAM Arunachalam, Vellayan Subbiah and Arun Venkatachalam.

Prashant Jain, former CEO of JSW Energy, will also pick up a minority stake as Climate Change Partner in the venture.

“Siemens Gamesa has built a leadership position in India’s onshore wind market, and we look forward to partnering with them, MAVCO, and Prashant to build on their success,” said Ankur Thadani, Partner at TPG and Head of Climate, Asia.

“We believe onshore wind will continue to play an increasing role in India’s green energy mix and this new platform, with Siemens Gamesa’s world-class product manufacturing and service offering, and the backing of TPG and MAVCO will continue to accelerate the delivery of gigawatts of clean power to millions of Indians across the socio-economic spectrum.”

Siemens Gamesa said it currently holds a share of about 30% in the Indian wind turbine manufacturing market. The company has a cumulative installation base of almost 10GW and provides services to a fleet of more than 7GW under long-term agreements there, which the new company will uphold.

The Design Center activities of Siemens Gamesa’s technology function in India, which employs around 700 employees, plus another 500 employees will not be subject of this transaction and will remain within the global wind power business of Siemens Energy.

Indian business leader and part of the Murugappa family, Vellayan Subbiah, will become chairman of the new company, while Prashant Jain will serve as executive vice chairman.

Vinod Philip will represent Siemens Gamesa on the board of directors.