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Sinovel, Goldwind May Lead Acquisitions in Wind Energy, PwC Says

China’s two-biggest wind turbine makers, Sinovel Wind Group Co. and Xinjiang Goldwind Science & Technology Co., may be preparing to acquire smaller producers as the industry consolidates, PricewaterhouseCoopers LLP said.

Flush with funds from initial public offerings, Sinovel and Goldwind are positioned to compete against western rivals such as Vestas Wind Systems A/S, Gamesa Corp Tecnologica SA (GAM), General Electric Co. and Siemens AG in the market for larger turbines, the business advisory company said in a report.

“Sinovel and Xinjiang Goldwind will provide formidable competition,” said the report on global renewable energy deals released in India today.

Beijing-based Sinovel, the second-biggest wind turbine maker after Vestas, raised 9.5 billion yuan ($1.43 billion) in its January debut in Shanghai, making it China’s biggest IPO this year, according to data compiled by Bloomberg. Goldwind raised 8.2 billion yuan in its October IPO in Hong Kong, according to its annual report.

“The sector will be watching to see the extent to which the IPO proceeds will be used for international expansion,” the report said. “Acquisition of independent companies could be a route to expansion in a sector where the costs of transporting large components inhibits the ability to use a single manufacturing hub.”

Sinovel and Goldwind will be able to spend more on research and development to compete in the market for the next generation of turbines having greater than 6-megawatt capacity, it said.

Meanwhile, the report said smaller independent wind companies are likely to get taken over by large multinationals, citing the precedent set by Clipper Windpower Ltd.

United Technologies Corp., the U.S. maker of Pratt & Whitney jet engines, bought the 51 percent of the London-based wind turbine maker it didn’t already own in December for 139.5 million pounds ($219 million) in cash.

“The days of independent operators look increasingly numbered,” the report said.

To contact the reporter on this story: Natalie Obiko Pearson in Mumbai at npearson7@bloomberg.net

To contact the editor responsible for this story: Reed Landberg at landberg@bloomberg.net

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