China Three Gorges Corporation is in exclusive talks to acquire German offshore wind farm Meerwind as it seeks to expand beyond hydropower, Reuters reported on Thursday citing insider sources.
The state-owned group, which runs the world's largest hydropower plant along China's Yangtze River, is negotiating final terms of a Meerwind buyout with its owner, the American multinational private equity firm Blackstone Group, the report said.
The negotiations are expected to add to the current political debate over such deals in Germany, which was sparked by Chinese appliance maker Midea's 4.5 billion euro buyout offer for robotics group Kuka.
Earlier this week, Germany's Economy minister Sigmar Gabriel expressed concern over growing Chinese interest in German companies and urged for a "level playing field" in foreign investment as well as a European-wide safeguard clause that could stop foreign takeovers of strategic assets crucial to the future economic success of the region.
People familiar with the 288-megawatt Meerwind wind park, which is located 23 km north of the German island of Helgoland and supplies power for up to 360,000 households, told Reuters that they expect the facility to be valued at about 1.6 billion euros.
Meerwind is owned by WindMW, in which the Blackstone Group owns an 80-percent stake, with the remainder held by German wind project developer Windland Energieerzeugung.
Representatives of Blackstone, Windland and China Three Gorges were not immediately available for comment.
The potential deal is the latest in a flurry of activity in Europe's offshore wind industry as wary investors seek regulated energy infrastructure with guaranteed returns.
German industrial groups are increasingly becoming attractive to Chinese buyers as the world's second largest economy tries to shift from a low-cost factory location to a high-tech industrial one in tandem with a push to cut down the country's dependence on fossil fuels.
Since January, Chinese groups have announced plans to invest more than 8 billion euros on German acquisitions, according to Reuters.