India's Reliance buying solar module maker REC in USD 771m deal

Reliance New Energy Solar, part of Indian conglomerate Reliance Industries Ltd (BOM:500325) has agreed to acquire Norwegian solar module manufacturer REC Solar Holdings AS, also known as REC Group, in a deal with an enterprise value of USD 771 million (EUR 666.2m).

Billionaire Mukesh Ambani’s Reliance Industries announced the agreement for the purchase from China National Bluestar Group Co Ltd on Sunday. In a bourse filing, the Indian group said that the full ownership of the Norwegian manufacturer will enable it to expand into the green energy market and support its goal of enabling 100 GW clean and green energy before the end of the decade. It plans to use REC’s heterojunction (HJT) technology at a fully integrated solar factory in Jamnagar, Gujarat, to initially produce 4 GW and eventually reach 10 GW per year.

"Reliance is now ready to set up a global scale integrated Photovoltaic Giga factory and make India a manufacturing hub for lowest cost and highest efficiency solar panels," the buyer said.

Oslo-based REC, which also has an operational headquarters in Singapore, has regional hubs in Singapore, Germany and the US. It produces solar-grade polysilicon at two sites in Norway and has a photovoltaic (PV) cell and module factory in Singapore. Its website shows it has produced roughly 40 million photovoltaic (PV) panels totalling 11 GW since it was founded in 1996.

At present, REC has more than 1,300 employees globally.

According to REC, the acquisition will enable it to significantly speed up its expansion and lift its production capacity to more than 5 GW in the next two-three years. On that note, Reliance said it will “strongly support” REC’s plans to add 2 GW-3 GW of new cell and module manufacturing capacity in Singapore and install a 2-GW cell and module factory in France and a 1-GW module production base in the US.

Goldman Sachs is acting as the buyer’s exclusive financial advisor in the transaction, while LW44 is providing financial counsel to REC.

(USD 1.0 = EUR 0.864)

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