Geoffrey Smith

Investing.com — Siemens Shares Gamesa Renewable Energy (BME) surged after Siemens Energy, the German majority owner (ETR), announced Wednesday that they are considering tender offers to take control of all wind turbine makers.

Siemens Energy did not provide any further information beyond stating that there was no guarantee.

Gamesa stock increased 11.5% in Madrid, but it is still less than half its peak of 2021. Siemens Energy stock, however, rose 2.8%.

Gamesa, the largest segment of Siemens Energy is probably the most significant. This segment has a strong secular outlook because of the global shift from fossil fuels towards renewable energy sources. On Wednesday, four countries along the North Sea (Belgium, Germany and the Netherlands), announced that 150 gigawatts offshore wind turbine capacity will be installed in 2050. This is Gamesa’s largest segment.

Siemens Energy’s other business, on the contrary, concentrates mainly on the production of fossil fuel power stations. This is an industry in steady decline across the industrialized world. Gamesa’s troubles are a major reason for 20% stock price decline since the German conglomerate that parent Siemens spun it off in 2002.

Gamesa has been facing financial difficulties for the past two years. The company’s margins have become more difficult due to rising commodity prices, as well as shortages of key components.

Gamesa launched last month a restructuring plan in an effort to fix its problems. It has issued three profit warnings over the past year, and delayed a lot of projects.

Gamesa is not the only troubled turbine manufacturer. An earlier month, a Danish competitor to Gamesa was in serious trouble. Vestas Wind CSE Systems stated that, despite record sales of its products, it would lose money before interest taxes this year. The company also reduced its dividend.