In a move to strengthen its wind turbine gearbox business, ZF Friedrichshafen AG has announced it is acquiring the large gearbox business of Bosch Rexroth AG on May 13.
A purchase price was not disclosed. The acquisition is subject to the approval of the antitrust authorities.
As part of the deal, ZF is taking over production locations in Germany and China, as well as the Bosch Rexroth's Lake Zurich, Ill.-based service facility. The plants employ more than 1,200 workers.
According to ZF, the acquisition is an entry into the business with industrial gears that are used in wind turbines, oil rigs, mine vehicles, tunnel drilling machines and cableways.
‘Strengthening our non-automotive segment is an important objective of our long-term corporate strategy,’ explains Dr. Stefan Sommer, CEO of ZF. ‘The acquisition of the industrial gears and wind turbine gearbox segments of Bosch Rexroth AG is an excellent supplement to our industrial technology portfolio and opens up new customer groups.’
In 2014, Bosch Rexroth generated sales of approximately EUR 300 million with the large gearbox business. ZF generated roughly 12% of its group sales with the industrial technology division.
According to ZF, the Witten, Germany-based production facility also houses the administration, development and sales departments. The Beijing location produces wind turbine gearboxes exclusively.
‘ZF's move to acquire the large gearbox business of Bosch represents the next phase of consolidation in the global wind market,’ explains Dan Shreve, partner at MAKE Consulting. ‘The continued pressure on profits within new unit sales and fragmentation of the wind services aftermarket will force diversified industry participants to make hard choices regarding their wind business.’
Shreve notes that Bosch has a demonstrated track record of successful technology deployment within a strong client base, and MAKE expects the combined scale of the ZF and Bosch businesses to have a higher level of supplier power with major turbine original equipment manaufacturers.
Going forward, Shreve notes that ‘the global footprint of the group will need to be rationalized in order to realize synergies associated with lowering production and administrative costs.’