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Algonquin buys Gamesa wind farms

by Andrew Bulkeley  |  Published March 9, 2012 at 11:09 AM
WindFarms_227x128.jpgSpanish wind farm equipment maker Gamesa Corporación Tecnológica SA on Friday, March 9, agreed to sell four U.S. wind farms to Canadian power company Algonquin Power & Utilities Corp.

Algonquin, of Oakville, Ontario, said it would pay $888 million for the wind farms in the Midwest and Texas, which will produce 1,644 gigawatt hours per year. Algonquin also contracted Gamesa to operate and maintain the parks for 20 years.

"We believe that working with Gamesa, a top global manufacturer of wind turbine generators, will maximize the strengths of both companies, provide opportunities for Algonquin to invest responsibly and profitably in wind power generation assets and to maximize returns," said Algonquin CEO Ian Robertson in a statement.

Algonquin said its renewable energy unit would acquire the assets and put them into a new joint venture with Gamesa. Both J.P. Morgan Energy Ventures Corp. and Morgan Stanley will also participate in the venture, contributing $360 million.

J.P. Morgan has also agreed to buy power from the four plants under agreements with an average length of 11.8 years, Algonquin said. Those deals will account for 73% of the electricity created.

The deal will close in two stages. Algonquin will complete the acquisition of the Pocahontas Prairie plant in Iowa and the Sandy Ridge project in Pennsylvania in the first half, when they go into operation. The final two -- Minonk in Illinois and Senate in Texas -- will close when they become operational in the fourth quarter.

As part of the agreement, Algonquin will also gain the right to consider deals for Gamesa's other wind farms in the U.S., where the Spanish company has 3,500 megawatts of parks under development.

Vizcaya, Spain-based Gamesa said the sale, excluding the 20-year contract, will contribute $35 million to its 2012 Ebit. Investors responded by pushing the company's shares up 11.3%, or €0.26, to €2.54 ($3.33) in afternoon Madrid trade.
Tags: Algonquin Power & Utilities Corp. | Gamesa Corporación Tecnológica SA | M&A

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