COPENHAGEN (Reuters) – Danish energy group Orsted (ORSTED.CO) has agreed to buy U.S. onshore wind farm developer Lincoln Clean Energy (LCE) in a $580 million deal, aiming to gain a foothold in what it sees as a key growth market.
The acquisition is the latest move for Orsted as it seeks to shed its fossil fuel business and become an entirely green energy company.
Orsted, which has so far mainly developed offshore wind farms in Europe, said the global market for onshore wind power is expected to grow significantly in coming years and that the United States is a key market.
“We see this as a very valuable addition to building a long-term platform for growth in the U.S. market, across technologies,” Chief Executive Henrik Poulsen told journalists.
The company, previously known as DONG Energy, said in February it was looking at investments in energy storage, solar projects and onshore wind. It was previously involved in onshore wind but sold the business in 2013 due to financial challenges.
Orsted shares, which have risen 57 percent since listing in Copenhagen in June 2016, were trading 5.4 percent higher at 405.90 Danish crowns by 0815 GMT.
The company is courting investors interested in green assets, which have received a boost from government policies. Last year it sold its oil and gas business to Ineos and has also put its Danish power distribution business up for sale.
Orsted has named the United States and Taiwan as its two key growth markets outside its core northern European region.
While it has won the right to develop two projects with a combined capacity of 1820 megawatt in Taiwan, it has so far been unsuccessful in winning tenders in the United States.
“We see Lincoln adding further to our critical mass and our presence in the United States,” Poulsen said.
Focused on wind and solar power, LCE has developed projects in Texas, California and New Jersey. Orsted is buying the business from investment manager I Squared Capital.
Orsted also posted second-quarter core profit (EBITDA) of 3.1 billion Danish crowns ($482 million) versus an average 3.13 billion seen in a Reuters poll. It said it expected full-year EBITDA towards the upper end of its previously guided range of between 12.5 billion crowns and 13.5 billion.
Orsted also said it was likely to sell 50 percent of its Hornsea 1 project in the British part of the North Sea this year.
Reporting by Teis Jensen; Editing by Jacob Gronholt-Pedersen and David Holmes