Hanwha SolarOne to tie up with Q Cells in USD-1.2bn deal

Dec 8, 2014 - China’s Hanwha SolarOne Co Ltd (NASDAQ:HSOL) has struck an all-stock deal to buy Hanwha Q Cells Investment Co Ltd in a bid to create the world’s largest solar cell maker with a production capacity of 3.28 GW.

Hanwha SolarOne will acquire Hanwha Q Cells from its sole owner -- Hanwha Solar Holdings Co Ltd (HSH), for about USD 1.2 billion (EUR 978m), the two companies announced on Monday. Both firms are part of South Korea’s Hanwha Group.

The combination will establish a solar equipment manufacturer with production facilities in Germany, Malaysia, China and Korea. Hanwha SolarOne currently has a cell and panel production capacity of 1.75 GW and 2.07 GW, respectively. Meanwhile, the target company can manufacture up to 1.53 GW of photovoltaic (PV) cells and 130 MW of modules annually. The enlarged business will be present in key solar markets including the US, China, Japan and Europe, with plans to expand into new markets.

The pair also intend to grow their downstream operations, where they have a combined initial solar project pipeline of 2.17 GW.

The merger is seen to bring revenue, capital expenditure and cost synergies. The combined business has generated a total revenue of about USD 733 million during the six months ended June 30, 2014, excluding some USD 49 million of intercompany transactions. Its executive headquarters will be located in Seoul, Korea, while the technology and innovation base will be in Thalheim, Germany.

The deal, with an implied enterprise value of USD 2 billion for the combined firm, will see Hanwha SolarOne issue around 3.7 billion own ordinary shares for all of the Hanwha Q Cells stock held by HSH. As a result, the latter will raise its current 45.7% stake in Hanwha SolarOne to about 94%.

The transaction is to be wrapped up in the first quarter of next year, after it is approved by the firm’s stockholders and certain regulators.

(USD 1.0 = EUR 0.816)

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