Swiss engineering firm ABB has announced plans to acquire U.S. solar energy company Power-One for $1 billion.
Swiss industrial group has reportedly agreed to pay $6.35 per share in cash for Power-One, which is positioned as the second-largest maker of solar inverters that allow solar power to be fed into electricity grids.
The $1-billion solar power deal is set to be completed after the summer.
ABB expects demand for inverters to boost up by 10 per cent a year until 2021, primary reasons being rising energy demand, electricity prices and falling production costs.
“Solar PV is becoming a major force reshaping the future energy mix because it is rapidly closing in on grid parity,” said ABB’s CEO, Joe Hogan. “Power-One is a well-managed company and is highly regarded as a technology innovator focusing on the most attractive and intelligent solar PV product. The combination of Power-One and ABB is fully in line with our 2015 strategy and would create a global player with the scale to compete successfully and create value for customers, employees and shareholders.”
“This transaction delivers significant value to our shareholders and will enable Power-One to accelerate its growth,” said Richard J. Thompson, CEO of Power-One. “Together we can better address the growing worldwide demand for innovative, renewable energy solutions and strengthen our global leadership. I believe ABB is the right partner and now is the ideal time for our companies to join forces.”
For many years ABB has brought its solutions to the solar PV industry and is on track to generate sales of more than $100 million in solar inverters in 2013. Solar inverters are one of the fastest-developing technologies in power electronics, requiring substantial research and development (R&D) resources. In 2012, ABB invested about $1.5 billion in R&D overall.
“The combination of these two successful companies will create significant value-driven growth based on innovation — which means inverters offer opportunities for differentiation — global reach, high quality and technology leadership,” said Ulrich Spiesshofer, head of ABB’s Discrete Automation and Motion division, into which Power-One will be integrated. “The acquisition supports the implementation of the division’s strategy for renewable energy and the goal to build on our strength in power electronics.”
Vontobel analysts see the acquisition as a smart strategic move for ABB to broaden its solar product portfolio.
