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Ørsted inks $510M deal to acquire Deepwater Wind

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Ørsted inks $510M deal to acquire Deepwater Wind

Ørsted A/S agreed to acquire Deepwater Wind from D.E. Shaw & Co. LP for $510 million in a bid to create the leading U.S. offshore wind platform.

"Today's announcement consolidates Ørsted's position as the global market leader in offshore wind with a strong foothold across Europe, North America and Asia-Pacific," said Martin Neubert, CEO of offshore wind at Ørsted, in an Oct. 8 statement.

Ørsted's current U.S. offshore wind portfolio totals approximately 5.5 GW, including development rights for up to 2 GW at its Bay State Wind joint venture with Eversource Energy off the coast of Massachusetts. It also includes development rights for up to 3.5 GW at the Ocean Wind site off the coast of New Jersey, and exclusive rights with Dominion Energy Inc. for the potential development of up to 2 GW of wind capacity.

Deepwater Wind has total potential capacity of approximately 3.3 GW. It comprises the 30-MW Block Island project in Rhode Island; 810 MW of offshore wind development projects in Rhode Island, Connecticut, Maryland and New York; and approximately 2.5 GW of offshore wind development potential across lease areas in Massachusetts and Delaware.

The combined company, which will be named Ørsted US Offshore Wind, is expected to deliver clean energy to seven states on the East Coast. The deal is expected to close by the end of 2018, subject to clearance by U.S. competition authorities.

Ørsted US Offshore Wind will be led CEO Thomas Brostrøm, the current president of Ørsted North America, and co-CEO Jeff Grybowski, the current CEO of Deepwater Wind. Joining them are CFO David Hang from the Deepwater Wind team and COO Claus Bøjle Møller from the Ørsted team.

Ørsted said the deal increases its capital expenditure guidance to 23 billion Danish kroner to 25 billion Danish kroner. The company previously had CapEx guidance of 16 billion Danish kroner to 18 billion Danish kroner.

As of Oct. 5, US$1 was equivalent to 6.48 Danish kroner.