Power struggle

Paris, May 24 (Reuters): France’s Areva said on Thursday it would not raise its bid for REpower, conceding defeat after a five-month battle with Suzlon Energy for control of the German wind turbine maker.

“Areva has decided not to go any further,” the French company, which is the world’s biggest maker of nuclear reactors, said in a statement.

REpower shares closed down 9.9 per cent at 150 euros in Frankfurt. They have nearly doubled since the start of the year.

Areva said it had concluded a co-operation agreement with Suzlon, under which Areva would maintain its 30 per cent stake in REpower and become the preferred supplier to Suzlon in the field of electricity transmission and distribution.

“It (Areva) benefits from an exit guarantee ensuring a value creation of over 350 million euros,” Areva said, adding it remained focused on the development of renewable energies.

REpower is one of Germany's biggest wind-turbine makers and is one of the world's leading companies in the sector, specialising in high-output turbine technology particularly suitable for offshore turbines.

Areva and Suzlon had been caught in a battle since the Indian group teamed up with Martifer, a unit of Portugal's largest builder Mota Engil, to launch a 126-euro per share tender offer for REpower on February 9.

This topped Areva’s 105-euro per share bid, announced on January 22.

In March, Areva raised its offer to 140 euros a share, valuing REpower at 1.14 billion euros, prompting Suzlon to lift its bid to 150 euros per share on April 10.

But Areva failed to receive public support for a further increase as French finance minister Thierry Breton warned against a “speculative bubble” in the wind industry.