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Tuesday, Feb 01, 2011
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Mergers & Acquisitions
Korea's Doosan buys Chennai unit of power co AE&E
Chennai, Jan. 31
South Korean engineering major Doosan has just completed the acquisition of the Chennai works of Austrian power company AE&E, it is reliably learnt.
While sources could not disclose the consideration, they point out that the significance of the acquisition lies in Doosan getting a manufacturing base in the growing Indian market for power plant boilers.
Doosan Heavy Industries and Construction Company has been securing orders in India. In fact, it won the first Indian order for a supercritical boiler for NTPC's Sipat project (3x660 MW) back in 2004. In 2007, Tata Power selected Doosan to supply five supercritical boilers of 800 MW each, a deal valued at $1 billion. Last year Doosan again bagged a $1 billion order from GMR Energy for building the Raipur-Chhattisgarh thermal power plant.
In the last few years it was clear that the Korean company wanted a manufacturing base in India. Its name figured in some acquisition and joint venture talks, including one in the context of a partnership with JSW Power.
Now, with AE&E, it has a manufacturing base.
AE&E is a familiar landmark for anyone who travels down the Poonamalee bypass on the Chennai-Bangalore highway. The plant once belonged to Deutsche Babcock and was later taken over by Austrian Energy.
Just a few months back AE&E secured its first order, for the supply of six CFBC-type boilers of 150 MW each, from the Essar group for the Salaya III project.
IDEA too on the block
AE&E has an engineering design services subsidiary, IDEA. This company is also on the block. Business Line has learnt that talks with Dodsal group of Dubai are at “an advanced stage.”
With Doosan coming to Chennai, the city will play hosts to one more South Korean major, after Hyundai (cars), Samsung (television sets) and Lotte (confectionery).
Tamil Nadu will then have one more power equipment manufacturer, after BHEL, Cethar Vessels, Ansaldo Caldaie (all boilers-Tiruchi), Toshiba (turbines-Chennai) and BGR-Hitachi (boilers and turbines-Chennai).
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