Siemens AG and Gamesa Corp. Tecnologica SA recently agreed to combine their wind-turbine manufacturing businesses. The merger, announced June 17 in a joint statement, is expected to create a company that will have a stranglehold on the industry, as well as speed up consolidation that has been influenced by competition and price pressures. Siemens will own 59 percent of the capital of the new business with Gamesa holding 41 percent ownership. The combined company will have its global headquarters in Spain with offshore divisions in Germany and Denmark. As part of the merger, Siemens will fund a cash payment of 3.75 euros per share, which will be distributed to Gamesa's shareholders following the completion of the merger, a total value of $1.1 billion. Additionally, Gamesa and Areva have entered into contractual agreements whereby Areva waives existing contractual restrictions in Gamesa's and Areva's offshore wind joint venture Adwen, simplifying the Gamesa-Siemens merger. The new company, which will be consolidated in Siemens' financial statements, is expected to have on a pro forma basis a 69 GW installed base worldwide, an order backlog of around 20 billion euros, revenue of 9.3 billion euros and an adjusted EBIT of 839 million euros. “The merger with Siemens constitutes recognition for the work performed by the company in recent years and evidences our commitment to generating value in the long term by creating significant synergies and extending the horizon of our profitable growth,” executive chairman and chief executive officer of Gamesa Ignacio Martin said in a statement. Gamesa and Siemens are highly complementary in terms of global footprint, existing product portfolios and technologies, company officials said. The combined business will have a global reach across all important regions, and manufacturing footprints in all continents. Siemens' wind power business has a strong foothold in North America and Northern Europe, and Gamesa is well positioned in fast-growing emerging markets, such as India and Latin America and in Southern Europe, the statement added. Additionally, the transaction will result in a product offering covering all wind classes and addressing all key market segments to better serve our customer's needs, it said. The combination of our wind business with Gamesa follows a clear and compelling industrial logic in an attractive growth industry, in which scale is a key to making renewable energy more cost-effective,” Siemens AG president and CEO Joe Kaeser said in a statement. “With this business combination, we can provide even greater opportunities to the customers and value to the shareholders of the new company. The combined business will fit right into our Siemens Vision 2020 and underlines our commitment to affordable, reliable and sustainable energy supply.” The companies anticipate significant synergy potentials. In total, annual EBIT synergies of 230 million euros are expected in year four post-closing. Closing is expected in the first quarter of the 2017 calendar year.