ABB bets on solar power with $1-bn takeover
Swiss industrial group ABB is to buy solar energy firm Power-One Inc for about $1 billion, betting growth in emerging markets will revive a sector ravaged by overcapacity and plunging demand in recession-hit Europe.business Updated: Apr 22, 2013 21:03 IST
Swiss industrial group ABB is to buy solar energy firm Power-One Inc for about $1 billion, betting growth in emerging markets will revive a sector ravaged by overcapacity and plunging demand in recession-hit Europe.
The world's biggest supplier of industrial motors and power grids said on Monday it had agreed to pay $6.35 per share in cash for Power-One, the world's second-largest maker of solar inverters that allow solar power to be fed into grids.
That is 57% above Power-One's closing price on Friday, though well below its 2010 highs of over $13.
We consider the acquisition of Power-One as a smart strategic move for ABB to broaden its solar product portfolio at the right time," Vontobel analysts said.
ABB said falling prices for solar systems and rising electricity costs meant solar panels were now a competitive source of energy. "Solar is long term the fastest growing renewable generation market in the world. ABB believes in this market," ABB discrete and motion head Ulrich Spiesshofer said in a company video.
He said ABB was buying in this market now because it saw a shift in solar energy demand towards emerging markets, such as China and the West Asia.
"Also some traditional markets like Japan are waking up and focusing very strongly on the solar field," he said.
Renewable energy is one of ABB's strategic priorities. It took a 35 percent stake in Germany's Novatec Solar in 2011.