COPENHAGEN (Reuters) - Danish wind turbine producer Vestas Wind Systems (VWS.CO) and Japanese conglomerate Mitsubishi Heavy Industries (MHI) (7011.T) have agreed to form a joint venture aimed at gaining a strong position in the market for offshore wind turbines.
Vestas, the world's largest wind turbine maker, has lagged behind competitors such as Germany's Siemens (SIEGn.DE) in the offshore market in recent years and announced in August last year that it was in talks with Mitsubishi about the offshore segment.
The Danish company will transfer the development of its large V164 8 MW offshore wind turbine, the order book for its V112 offshore turbine, existing offshore service contracts and about 300 employees to the joint venture, Vestas said in a stock exchange announcement on Friday.
MHI will inject 100 million euros ($134.8 million) in cash and a further 200 million euros based on certain milestone achievements reflecting the "natural early product life cycle of the V164 turbine", the announcement said.
"Leveraging on the respective strengths of each organization, 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," Vestas said.
The main markets for offshore wind turbines are the North Sea coastal countries, particularly Britain and Germany.
"The most important factor for Vestas and its position in the market is the signal that they now have a 'big brother'," Alm. Brand analyst Michael Jorgensen said.
He believes that Vestas shares will rise to about 150 crowns when the Danish stock exchange opens at 0700 GMT. The shares closed at 133.10 crowns on Thursday.
The Vestas share price has risen 287 percent this year as investors have gained confidence in its turnaround progress.
Vestas replaced embattled chief executive Ditlev Engel with Anders Runevad from Swedish Ericsson (ERICb.ST) in August.
Equity ownership ratios in the new joint venture will be 50 per cent each for MHI and Vestas, with an option for MHI to increase its stake to 51 per cent in April 2016.
The venture will not have any impact on the Vestas annual accounts for 2013 and is expected to have only a marginal impact on its 2014 earnings, the statement said.
Reporting by Teis Jensen; Editing by David Goodman