By Andres Gonzalez and Isla Binnie
MADRID -British renewable power generator and network operator SSE is in advanced talks to buy Siemens Gamesa's wind farm development unit, three sources close to the matter told Reuters.
Bidders were originally looking at valuations of around 300 million euros ($323.58 million) but the price tag grew during the process. The final deal was set to be worth more than 500 million euros, and include an agreement for Siemens Gamesa to provide turbines for the sites, the sources said.
If the deal goes ahead, it would be the latest acquisition of low-carbon generation by a large power producer as companies and countries try to phase out planet-warming fossil fuels.
The quest has become more urgent in Europe since major energy supplier Russia invaded its neighbour Ukraine on Feb. 24.
A deal is expected to be announced later this week, but the sources, who requested anonymity as the matter is confidential, said there was a chance no agreement would be reached.
The wind farm projects on sale will have the capacity to generate more than 3 gigawatts (GW) of electricity in France, Greece, Italy and Spain and a team of up to 50 staff, one of the sources said.
Bank of America is advising Siemens Gamesa in the process.
Siemens Gamesa and Bank of America declined to comment. SSE did not reply to a request for comments.
SSE sold its household supply and services arm two years ago, and has pledged to invest 12.5 billion pounds in clean energy projects to 2026.
In March, it raised cash by selling its 33.3% stake in gas distribution operator Scotia Gas Networks Ltd (SGN) for nearly 1.29 billion pounds ($1.70 billion).
SSE has fended off calls from activist investor Elliott to spin off its renewables business. It has raised its earnings forecasts twice this year, giving most of the credit for this to strong performance at its thermal and hydro businesses.
Siemens Gamesa, formed by the 2017 merger of Spain's Gamesa with the wind division of Germany's Siemens, is looking to raise cash and protect its core turbine manufacturing business from the margin-eroding effects of soaring materials and logistics costs.
One gigawatt of power is equivalent roughly to the average production of a nuclear power plant.
(1 euro = $1.0784)
