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GE boosts renewable-energy unit with $1.65 billion wind deal

Blades made by LM Wind Power are being used in Deepwater Wind’s offshore wind farm near Block Island, R.I.
Blades made by LM Wind Power are being used in Deepwater Wind’s offshore wind farm near Block Island, R.I. Deepwater Wind

NEW YORK — General Electric Co. plans to buy a maker of wind-turbine blades for $1.65 billion, bolstering the renewable-energy business amid growing demand for clean power.

The deal for Denmark-based LM Wind Power will enhance GE’s ability to serve customers in the onshore and offshore wind markets, the companies said Tuesday in a statement. LM Wind Power, which is owned by private-equity firm Doughty Hanson, will run as a standalone business within the renewable-energy unit.

“It shows GE’s true commitment to the wind industry,” Jerome Pecresse, chief executive officer of GE Renewable Energy, said in a telephone interview.

The deal marks the latest in a string of acquisitions for the Boston-based company and accelerates growth in its wind power business. GE established the standalone renewables unit after closing the $10 billion acquisition of Alstom SA’s power operations last year.

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GE is rushing to meet global demand for clean energy sources as falling costs make renewable power more competitive with fossil fuels. The company, which also has a sizable hydropower business, is one of the world’s leading onshore wind turbine makers and is trying to build out a complementary offshore operation.

GE is supplying equipment this year for the Block Island project off Rhode Island, the first offshore wind farm in the United States.

“GE is clearly willing to grow in offshore,” Pecresse said.

GE rose 0.21 percent to close at $28.92. The shares fell 7.4 percent this year through Monday, compared with a 5.9 percent gain in the Standard & Poor’s 500 Index.

LM Wind Power, the largest blade supplier to GE’s wind business, started as a furniture maker in the 1940s before transitioning to glass-fiber manufacturing in the next decade. It started producing turbine parts in 1978 and has since made more than 185,000 blades.

The European company has 13 factories on four continents. GE plans to maintain LM Wind’s headquarters and management team. GE said it would retain its ability to source blades from other companies.

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GE’s deals in recent months include offers for a pair of 3D-printing companies for $1.4 billion and a $495 million agreement for software developer Meridium Inc. The company has emphasized “vertical integration” moves for its own suppliers, according to Credit Suisse analyst Julian Mitchell.

“The acquisition is consistent with the company’s trend towards more in-sourcing,” said Mitchell.

S&P Global Ratings cut GE’s credit rating on Sept. 23 over the possibility that the company would add debt to support possible acquisitions.