AMSC cancels €190m takeover of The Switch
AMSC (formerly American Superconductor) has terminated its agreement to buy the Finnish drivetrain technology specialist, The Switch Engineering, because of the adverse market conditions for a financing to fund the acquisition. The Switch’s shareholders, which include the drives-maker Vacon and the power semiconductor specialist Semikron, will keep a €14.2m advance payment made by AMSC in June as a break-up fee.
Earlier this year, AMSC announced it was buying The Switch for €190m. The Switch, founded in 2006, designs and manufactures solid-rotor permanent magnet generators and motors, and power conversion packages, primarily for windpower and other renewable energy applications. It specialises in direct-drive machines. Its sales in 2010 were worth €1345.6m.
Acquiring The Switch would have given AMSC – which makes electrical systems for wind turbines – access to The Switch’s customers, including Goldwind, China’s second-largest wind turbine manufacturer.
Despite the ending of the takeover agreement, AMSC president and CEO Daniel McGahn says that “we continue to see strong synergies between our two companies and expect to continue to work collaboratively on drivetrain solutions that increase wind turbine reliability and lower the cost of energy”.
The Switch says that it will continue to operate as an independent company serving global windpower manufacturers.
“The fundamentals of our business strategy remain in place and the outcome of the proposed acquisition will not change our position in the market,” says president and CEO, Jukka-Pekka Mäkinen (a former vice-president of Vacon). “We have been able to develop The Switch business offering and our company, even during challenging times in the global windpower market, and this makes us stronger than ever.
“We will continue to develop co-operation and joint sales opportunities for drivetrain solutions to increase wind turbine reliability and lower the cost for our customers,” he adds. “It is clear that drivetrain components will have an important role as wind turbine sizes increase.”
As well as having a 14% stake in The Switch, Vacon also supplies it with converters. Both companies have their headquarters in Vaasa, Finland.