BHEL Participates Bidding to Acquire Skoda Power's Global Operations

---

Researched by Industrial Info Resources (Sugar Land, Texas)--Bharat Heavy Electricals Limited (BHEL) (BSE:500103) (New Delhi), India's largest equipment manufacturer and engineering company in the power sector, has announced plans to join the bidding process to acquire Czech power firm Skoda Power AS (Plzen, Czech Republic), a wholly owned subsidiary of Skoda Holding AS. Skoda Power is a leading manufacturer in Europe for producing and supplying technological equipment, and offering customer services in the field of power generation. The company is a pioneer in manufacturing steam turbines for fossil fuel and nuclear power plants.

The bid to acquire Skoda Power's global operations is being held online, and BHEL is set to compete against 15 other companies. The company is eyeing only the power business of Skoda Holdings and has announced it will hire the services of a consulting firm for valuation of the company, if selected. The global firms being considered for consulting advice on the overseas unit's acquisition process are PricewaterhouseCoopers LLP (New York, New York), Ernst & Young (London, England) and BearingPoint Incorporated (NYSE:BE) (McLean, Virginia). The state-owned special status "navratna" enterprise has not disclosed the acquisition amount, but industry speculators estimate the total value of Skoda Holdings to be between $17 billion and $20 billion. BHEL will have a strategic advantage of gaining a foothold in the European markets by acquiring Skoda Power. The company's expertise in thermal technology for ultra-supercritical sets, as well as in technology for making equipment that generates nuclear power, will be a good value proposition for BHEL if the acquisition comes through.

Skoda Power's Indian operations will also be a part of the bid. The firm is in the process of setting up a manufacturing facility to produce power equipment in Chennai. It is currently supplying a back-pressure turbine for the Bokaro Steel Plant (New Delhi). Skoda Power, with estimated revenue of $315 million from its global operations, had announced that it will set up a turbine manufacturing facility in Hyderabad at an investment of $55 million. The manufacturing and assembling plant was expected to be commissioned by 2011.

Industrial Info Resources (IIR) is a marketing information service specializing in industrial process, energy and financial related markets with products and services ranging from industry news, analytics, forecasting, plant and project databases, as well as multimedia services.