The Nordex Group on Sunday announced the sale of its European onshore wind and solar development project pipeline to German utility RWE AG for EUR 402.5 million ($474 million)
Nordex (NRDXF) said that the 2.7 gigawatts of wind and solar projects are located in France, Spain, Sweden and Poland. With around 1.8 GW, the focus is on wind energy projects of various stages of maturity in France. The portfolio in France also includes a pipeline of 0.1 GW of solar PV projects. The deal is expected to close in the fourth quarter of this year.
“The quality of the underlying assets and our consistent development track record have resulted in a strong interest for our project development pipeline from multiple market participants crystallising an excellent outcome for Nordex”, said Nordex CEO José Luis Blanco. “Significant proceeds from this transaction would strengthen our balance sheet as we continue to build on our strong order book and capture market opportunities with our product portfolio.”
Nordex develops its own portfolio of wind farm projects. Projects are then sold on to customers or investors. The company said that it has already sold parts of its project development portfolio in the past under “attractive” market conditions, adding that it will continue with its wind developments in its other markets.
RWE (RWEOY) said that the acquisition will strengthen the company’s position in France, one of its target markets and represents a unique growth opportunity. The deal adds to RWE’s existing 22 GW development pipeline, the company said.
“France is one of the most attractive markets in Europe and characterised by ambitious renewable energy targets,” Anja-Isabel Dotzenrath, CEO of RWE Renewables. “The transaction leverages our growth ambitions in France in the fields of offshore and onshore wind as well as large solar plants and battery storage.”
After hitting a low at the end of March, RWE shares have now more than recouped all of this year’s earlier losses and are trading about 22% higher than at the beginning of the year.
RBC Capital analyst John Musk, who has a Buy rating on the stock with a $42.34 price target said the company's 13GW renewable capacity target by 2022 is "readily achievable". The analyst added that RWE's strong balance sheet and "opportunity set" suggest that growth could accelerate longer-term. Overall, RWE scores a Strong Buy analyst consensus based on 6 unanimous Buy ratings. The $41.17 average price target indicates 10% upside potential in the shares over the coming year. (See RWE stock analysis on TipRanks).
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