Highlight of Suzlon Acquisition

1. Merger& Acquisition
SUZLON – SENVION ACQUISITION
BY HEMANT SINGH , RAJESH ZENA, FAHAD, SUDHARSAN (MPE18), NMIMS BANGALORE

2. Suzlon at glance : 2007-08
Financial parameters Suzlon
Revenue (Consolidated) $ 3.4 bn
Shareholder Equity $ 1.75 bn
Industry Manufacturing/Engineering (Wind
Energy )
Year of establishment 1995, India
Objective : Analyze the transaction of acquisition

3. Suzlon Synergy – Why to acquire REPower
(Senvion)
 The Synergy behind Acquisition :
 Access to European Market through REPower acquisition
 Will gain know how technologies in high capacity larger offshore Wind Turbine
Generator (WTG)
 Will become fully integrated wind energy company and 4th in world in Wind
Power
Question : How to achieve this ?

4. Transactions Timeline and Milestones
 Investment Banker :Yes Bank
2005 2006 2009
RE Power Shareholding pattern:
• AREVA – 30%
• Martifier – 22.5%
2012 2014 20152007
Suzlon –SENVION
Deal Size = $1.4bn
Cash $250 mn
Share Price : 292 INR
Suzlon sold SENVION
Deal Size = $1bn
Share Price : 13 INR
High Debt
• Suzlon bidded along with Martifier to take control of 30% stake of AREVA
• As per German regulation the transfer of technology and take over can not be completed as Suzlon
was still not having control . Strategy was to take additional 22.5 % of Martifier and agreement was
done in initial bidding process

5. Suzlon : 2015
 Debt : INR 165bn/ 16500 Cr
 Earning from Senvion Sell : INR 70bn /7000 Cr
 The company plan to reduce its debt by INR60 bn & remaining INR 10bn in execution
of its project
 Leverage became very high and demand for wind power demand went down post
acquisition of REPower, 2007 onwards
 Earn out clause of €50m based on business performance i.e Suzlon will get this
revenue if the business do well & probably this was better option for keeping Senvion
past performance.

6. Resale of Senvion (Former REPower)
 The question is why the sale of Senvion was so crucial for Suzlon
 There was no way for Suzlon to reduce its debt without selling the company which they
acquired 8 years back in 2007 although the 65 % of revenue was coming from sold
Senvion company.
 Suzlon want to focus in Domestic and US market and to do so company need to
restructure the finance and they sold the Senvion to reduce its tax burden.
 Highlight of Deal :
Earnout Claue & All in cash deal

7. Resale of Senvion (Former REPower)
 The question is why the sale of Senvion was so crucial for Suzlon
 There was no way for Suzlon to reduce its debt without selling the company which they
acquired 8 years back in 2007 although 65 % of Suzlon revenue was from Senvion.
 Suzlon issued series of FCCB maturing in 2016 and 2019. It failed to $ 200m in 2012 and this
was first FCCB default by any Indian compay
 Suzlon want to focus in Domestic and US market and to do so company need to restructure
the its finance and they sold the Senvion all in cash deal to reduce its tax burden.
 As the deal was done in all in cash means Suzlon was not willing to participate in further
growth of company
 Suzlon Current status:
 Since last two financial year company is generating the profit and its current share price is ~
INR 13 per share

8. Q&A
 Q & A :
 Thanking You