INTERNATIONAL BUSINESS

CIA 2 ON SUZLON - REPOWER

Nishit Agarwal 1111518 5 BBA- A

ACQUISITION BETWEEN SUZLON - REPOWER

Introduction India's Suzlon Energy Ltd. had completed the acquisition of German wind turbine maker REpower and controlled 87.1 percent along with France's Areva and Portugal's Martifer in the company. On May 25, Suzlon had said it hoped to control 75 percent of REpower and become the world's fourth largest wind-tubrine maker, after rival Areva did not raise its bid for the German company. Suzlon and Areva, which were locked in a battle over REpower, decided to jointly run the German firm, after both separately failed to get a majority stake in it. Suzlon said in a statement it held 33.85 percent in REpower after acquiring 25.46 percent more during an extended offer period for REpower's shares that ended on May 25. Areva is the second-largest shareholder in REpower with 30.15 percent, while Martifer, a unit of Portugal's top builder Mota Engil holds 23.08 percent. Suzlon had offered 150 euros per REpower share, valuing the German firm at around 1.2 billion euros ($1.6 billion) while Areva, the world's biggest maker of nuclear power plants, did not raise its offer price from 140 euros per share. While Areva has the option to sell its stake to Suzlon after one year, Martifer can sell its share within two years up to 265 million euros, also to Suzlon.

About Suzlon Energy Ltd. (BIDDER) Suzlon Energy , market leader in Asia and the worlds fifth largest wind turbine manufacturer in terms of market share, offers customers total wind power solutions including consultancy, R&D, manufacturing, operations & maintenance services. Not even on the list of the worlds Top 10 wind-turbine manufacturers as recently as 2002, Suzlon passed Siemens of Germany last year to become the fifth-largest producer by installed megawatts of capacity. It is surpassed only by the market leader, Vestas Wind Systems of Denmark, as well as General Electric, Enercon of Germany and Gamesa Tecnolgica of Spain. On the back of the globally increasing demand for wind energy and its competitive advantage of having control over its supply chain through backward integration Suzlon plans to further increase its global presence. Suzlon is Indias leading manufacturer of wind turbine generators and has successfully expanded into China, the United States, Belgium, Denmark, Australia and Germany. Last year, Suzlon acquired Hansen Transmissions in Belgium, a leading producer of gear-boxes. Suzlon plans to create 300 news jobs at Hansen during the following years. Suzlons R&D centres are located in Germany, in the Netherlands and in India. The international business of Suzlon is managed by Suzlon Energy A/s out of Aarhus in

Denmark, which in turn has country headquarters in Beijing, Chicago and Melbourne for China, United States and Australia respectively. The Group Management office of Suzlon is located in Amsterdam, the Netherlands. Suzlons quality systems have been certified by Det Norske Veritas (DNV), one of the leading global registrars of quality systems, as being in compliance with the requirements of ISO 9001:2000. Suzlons Vision To be the technology leader in the wind industry To be among the top three wind energy companies in the world To be the most respected brand and preferred company for all stake holders To be the best team and best place to work To be the fastest growing and most profitable company in the sector

Strategic Focus Vertical Integration Focus on Key High Growth Markets Growth through M&A Cost Efficiency R&D and Innovation Focus on Customer Satisfaction

About REpower Systems (TARGET) REpower is one of the leading players in the fast-growing worldwide wind energy sector, specializing in high output turbine technology particularly suitable for offshore turbines. The management of the company has forecasted revenues of EUR 450 million for 2006. Aside from being one of the leading players in its home market of Germany, REpower has established a strong presence in a number of key European markets and is pursuing promising development plans in China, India and the USA. Motives Behind the Acquisition The partnership will create a combination poised for technological leadership in wind power solutions. Looking forward into the future the following benefits can be reaped from this strategic acquisition: REpower and Suzlon will together form the best team in the global wind energy industry The combination brings together strong R&D, excellent technology teams and access to European markets with a vertically integrated supply chain, global market reach, strong technology and manufacturing base and financial muscle The combination promises to be a technology powerhouse capable of delivering and sustaining high growth with high margins

The REpower Suzlon combination has the potential to become the world leader in wind power solutions. The partnership will create the most reliable product with the best life cycle cost.

Advantages of the acquisition Entry into large European markets Complimentary product portfolio - offshore technology Improve REpower margins through synergy Capitalize on know-how and brand equity

Offer Price Suzlon spent nearly Rs 10,500 crore ( 1.5 billion) on buying REpower. However, it was the REpower acquisition that has been weighing it down. Suzlon entered into a bidding war for the first part of the stake-buy in the German wind turbine manufacturer, whose technology it hoped to acquire and sell. German law made it difficult for Suzlon to do this, because of which it had to increase its stake beyond 90 per cent. It now owns about 94 per cent of REpower. Shareholder Structure After Acquisition Suzlon: 33.60% Martifer: 23.00% AREVA: 29.90% Free-Float: 13.50%