Deals
Siemens, Gamesa Windpower Merger Seen Needing to Harness Savings
- Barclays analysts caste doubt over planned cost-cuts
- Failure to deliver on synergies a key risk: Morgan Stanley
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Siemens AG’s $11 billion wind-power turbine merger with Gamesa Corp. Tecnologica SA creates a market giant to rival Vestas Wind Systems A/S and General Electric Co. that now faces the challenge of harnessing planned savings, according to analysts at Barclays and Morgan Stanley.
From a strategic rationale standpoint, the deal is “extremely compelling," offering attractive terms for Gamesa and the means for Siemens to expand in wind power, Kepler analyst William Mackie wrote in a note Monday. Siemens and Gamesa have identified cost cuts of 230 million euros within four years, and while the product synergies “are clear,” achieving that target remains a risk, Morgan Stanley analyst Ben Uglow said in a note.