NSP, DelSolar join forces to create the largest PV cell producer in Taiwan
- The combined capacities of the two companies include 1.9 GW of PV cell production
On November 19th, 2012 Neo Solar Power Corporation (NSP, Hsinchu City, Taiwan) and Delta Electronics Inc. (Taipei City, Taiwan) announced a strategic cooperation, which will create the largest solar photovoltaic (PV) cell manufacturer in Taiwan and the second-largest globally.
The companies will consolidate the PV cell and module businesses of NSP and Delta subsidiary DelSolar as well as the systems business of Delta, with the combined entity holding a PV cell capacity of 1.9 GW. NSP will also launch a tender offer to acquire a 13% to 15% stake in DelSolar.
"While the oversupply issue has not yet been resolved, technology and cost leadership would be the two key differentiators for solar companies to excel in the long run," note the two companies in a press statement.
"Integration between solar cell and module/system is also expected to be a major development trend in the industry."
Share exchange basis of consolidation
Through the tender offer, each DelSolar share tendered will receive 0.703 newly issued NSP shares and NT 0.50 (USD 0.017) in compensation. The companies note that Delta currently owns a 54% stake in DelSolar, and upon closure of the tender, NSP will assess a potential merger with DelSolar.
UBS acted as lead financial advisor in the transaction, with Grand Cathay acting as joint financial advisor and tender offer agent.
Enhanced economies of scale among benefits of potential merger
NSP currently has a PV cell capacity of 1.3 GW and a module capacity of 60 MW, with DelSolar holding a cell capacity of 600 MW and a module capacity of 180 MW, as well as a downstream systems business.
The companies note that a combined company would have a cross-strait cell/module manufacturing base, enhanced economies of scale, reduced procurement cost and the integration of both companies' research and development and sales resources.
2012-11-20 | Courtesy: NSP, Delta | solarserver.com © Heindl Server GmbH
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