China Ming Yang Wind Power Group (NYSE:MY) has agreed to buy Wise Renergy Holdings Ltd for CNY 925.4 million (USD 149m/EUR 132m), which will allow it to improve the quality of its products and reduce costs.
The Chinese wind turbine maker said Monday it will pay CNY 300 million in cash, while the rest of the acquisition consideration will be covered through the issue of stock.
Wise Renergy and its subsidiaries, collectively referred to as RENergy, develop, produce and sell electrical system equipment, including main control systems, pitch control systems and converters for wind turbines. They are among Ming Yang’s major suppliers.
RENergy has a headcount of more than 550, 30% of which are focused on research and development (R&D). The target group has nine trademarks and more than 130 patents.
China Ming Yang explained that the acquisition will allow it to cut costs for customers by consolidating both companies' procurement and R&D activities. Furthermore, the buyer intends to integrate RENergy's patented electrical control system technologies into its own products, thus raising their overall quality.
Under the terms of the deal, Ming Yang will acquire 99% in Wise Renergy’s parent company China Smart Electric Group Ltd. The transaction is to close on or about May 20 and China Ming Yang expects to take the remaining 1% in the “near future”.
Upon completion of RENergy’s buy, China Ming Yang is expected to be able to develop all major wind turbine generator components in-house.