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Study of the Suzlon-Hansen Merger

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Suzlon Hansen Merger

Contents
SUZLON 3
HANSEN TRANSMISSION 4
INDUSTRY ANALYSIS 4
Wind energy – at an inflexion point 4
MARKET POTENTIAL OF WIND ENERGY 4
Value Chain of the industry 4
Critical success factors 4
Wind energy project sector 4
Industrial and wind turbine gearbox manufacturing 4
STRATEGIC INTENT 4
SUZLON 4
Suzlon competitive strengths 4
Risks and concerns 4
Strategic Intent of the acquisition for Suzlon Energy 4
Strategic Intent of the acquisition for Hansen Transmissions 4
Congruence in Intent 4
Synergy Benefits 4
Deal Structuring 4
Post merger integration 4
Organization structure of SEL after reorganization 4
Assessment of the Deal 4
References 16

SUZLON
Suzlon Energy Ltd (Suzlon), promoted by …show more content…

In UK, for instance, developers have contracted to build wind farms at a price of less than USD 3 cents/kWh, comparable with other conventional sources of power. Rising fossil fuel prices have dramatically influenced the competitive position of conventional power generation technologies rendering wind power even more competitive. Today favorable cost economics has brought wind energy at an inflexion point.

Figure 2 - Potential of wind power
While operational costs have always been an advantage for wind power, high capital cost per unit constrained its economic viability in the past. Technological advancement has made it possible to build larger and lighter turbines, which can capture more energy leading to a substantial fall in capital cost per unit. Over the last two decades, there has been a 55-fold increase in yearly electricity output from wind, partly because the swept area is 25 times larger (due to larger turbines) and partly because the tower height has increased substantially, and wind speeds increase with distance from the ground.

While it is possible to build turbines of up to 5MW even today, the corresponding increase in weight and cost makes the product commercially unviable. By increasing the proportion of advanced blade materials such as glass fiber through innovative process engineering techniques, equipment manufacturers have

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