June 20, 2016 – Siemens and Gamesa say they have signed binding agreements to merge Siemens’ wind power business—including wind services—with Gamesa to create a “global wind power player”.

Siemens notes it will receive newly issued shares of the combined company and will hold 59% of the share capital, while Gamesa’s existing shareholders will hold 41%. As part of the merger, Siemens will fund a cash payment of €3.75 per share, which will be distributed to Gamesa’s shareholders (excluding Siemens) following the completion of the merger (net of any ordinary dividends paid until completion of the merger). Siemens says the cash payment represents 26% of Gamesa’s unaffected share price at market close on January 28, 2016.

Additionally, Gamesa and Areva have entered into contractual agreements in which Areva waives existing contractual restrictions in Gamesa’s and Areva’s offshore wind joint venture Adwen. Siemens says this simplifies the merger between Gamesa and Siemens.

The new company, which will be consolidated in Siemens’ financial statements, is expected to have a 69GW installed base worldwide, an order backlog of around €20 billion and revenue of €9.3 billion—on a pro forma basis (last twelve months as of March 2016). The combined company will have its legal domicile and global headquarters in Spain and will remain listed in Spain. The onshore headquarters will be located in Spain, while the offshore headquarters will reside in Hamburg, Germany, and Vejle, Denmark.

“The merger with Siemens constitutes recognition for the work performed by the company,” said Ignacio Martín, executive chairman and CEO of Gamesa. “Today, we are embarking on a new era, creating—alongside Siemens—a world-leading wind player.”

Siemens and Gamesa expect significant synergy potentials in a combined setup. In total, annual EBIT (earnings before interest and tax) synergies of €230 million are expected in year four post closing, according to Siemens.

“As a leading wind power player, especially in emerging markets, Gamesa is a perfect partner for us,” added Lisa Davis, member of the managing board of Siemens AG. “Teaming up will enable Siemens and Gamesa to offer a much broader range of products, services and solutions to meet customer requirements. The move will put Siemens and Gamesa in the best position to shape the industry for lower cost of renewable energy to the consumers.”