M&A

: the acquisition of GAMESA by ABB

Abstract

This dissertation focus is the analysis of a possible takeover of a wind turbine manufacturer (Gamesa) by one of the biggest conglomerates in the world (ABB). The proposed deal will have has business background the diversification strategy of ABB, as well the attractiveness of the wind power industry, as well the down trend of both Gamesa’s business and value. For this proposal, it is combined a deep industry and company analysis with the state of the art valuation tools. Literature on Valuation and M&A is reviewed and applied to evaluate the standalone and merged businesses, proposing an optimal offer price and mode of acquisition. The whole analysis relies on data until end of 2011, being performed estimated for both companies stand alone and the combined firm, for a growth and stable period. Data from comparables and market benchmarks where also collected for different tools usage. Gamesa standalone is found to be slightly undervalued, with 9% upside potential, and synergies are estimated to be around 59% attributable to Gamesa in the combined firm value. Therefore, it is concluded that the deal will create a sustainable value for both companies, being the large stake attributable to ABB.

Date of Award	2012
Original language	English
Awarding Institution	Universidade Católica Portuguesa
Supervisor	Peter Iordanov Tsvetkov (Supervisor)