Doosan Heavy Industries & Construction, the leading Korean heavy industries company, has signed an agreement to buy Czech power plant equipment maker Skoda Power a.s., which will provide the rights to proprietary turbine technologies used in power plants.
Doosan and Skoda Holding agreed in Prague, Czech Republic, the acquisition that gives Doosan a 100% equity stake in Skoda Power. The transaction is expected to be completed by the fourth quarter of 2009 when the full financial terms of the agreement are met.
The acquisition will enable Skoda Power to expand its product range and enter new markets while strengthening its presence in the Czech Republic and Slovakia. Doosan already has an established European presence in key markets including the UK, Germany and Poland through its subsidiary Doosan Babcock Energy Ltd, based in UK. Additionally, Doosan already has a presence in the Czech Republic through its subsidiary Doosan Infracore, which operates a manufacturing plant in Dobris for Bobcat construction and utility equipment.
Skoda Power, a subsidiary company of Skoda Holding which is one of the Czech Republic’s oldest and most respected business groups, is one of only a few power plant equipment firms worldwide to possess proprietary technologies in the steam turbine field.
This acquisition will add to Doosan’s capabilities in the core technologies for boilers, turbines, and generators – the three key components of modern power plants – positioning the company as a leader in the global power plant equipment industry.
Doosan’s new access to proprietary turbine technologies will enable the company to dramatically improve its competitiveness in the power plant equipment business as well as significantly expand business opportunities in these markets.
The deal means that the newly extended Doosan family will now be a complete plant supplier with capability to provide single-source EPC (Engineering/Procurement/Construction) solutions. This will enable the group to dramatically improve its competitiveness in the power plant equipment business as well as significantly expand business opportunities in new markets.
Commenting on the deal, President and CEO Geewon Park said, “We expect the synergies of the Skoda Power acquisition to generate an additional US$4.26 billion (€3.0 billion/£2.60 billion) in annual revenue in 2020. In the coming years, Skoda Power and Doosan Babcock will spearhead our progressive expansion in Europe, the US, and other developed markets.”
Working in partnership with Skoda Power, Doosan aims to grow turbine genset revenues as it set its sights on the global turbine market and becoming one of the industry’s top-tier suppliers. The deal also makes it possible for Doosan to enter the retrofit and other profitable power plant services markets, enabling the company to compete with global industry leaders across the entire power generation value chain.
Additionally, Doosan plans to set up Doosan Power Systems (DPS) to oversee Skoda Power and Doosan Babcock as its power solutions business in Europe and the Americas. Through the formation of DPS, Doosan is able to move one step closer in its ambition to become a top-tier complete plant supplier in those markets.
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