The Danish industrial giant Danfoss announced in a press release today that it has joined forces with the Finnish AC drives company Vacon. The news comes following a bid by Danfoss for 100 percent of Vacon’s shares at 34 euros per share. This puts the sale price at 1.038 billion euros. Vacon's board of directors has recommended its shareholders to accept the bid.

The deal is subject to approval by the relevant competition authorities and is subject to Danfoss securing 90 percent of the shares.

READ MORE: Danfoss off to encouraging start

Top player
In the press release, it is highlighted that both companies are currently significant players in the AC drives business – devices for the control of electric motors that are used, among other things, in the generation of renewable power. The management of both Danfoss and Vacon believe that together they will be able to achieve a stronger market position following the deal.

Niels B Christiansen, the chief executive of Danfoss, described the company’s outlook going forward. “We have a clear strategic ambition to be one of the absolute top players in the businesses where we operate,” he said in the press release.

“Vacon is a very strong and innovative player, and by creating this new drives business we can ensure a strong long-term growth trajectory.”

Vacon’s president and chief executive, Vesa Laisi, also expressed optimism about the ramifications of the bid.

“I believe that customers will benefit significantly from the two companies joining forces as they will bring even more competitive, innovative, and attractive AC drives to the market,” he said in a press release.

“Today, Vacon is stronger than ever, and it has a great future ahead together with Danfoss.”