Swiss-Swedish engineering giant ABB said Monday that it would acquire the California company Power One, which specialises in renewable energy such as solar, for a whopping $1.0 billion (766 million euros). The transaction, which has been approved by the US company's board, should wrap up during the second quarter, ABB said in a statement.
The engineering giant said it would pay $6.35 per share in cash, or a total of $1.028 billion, but stressed that the deal would also allow it to absorb Power One's $266 million cash holdings. Based in Camarillo, north of Los Angeles, Power One is a leading maker of solar photovoltaic inverters, used to transform the energy captured by solar panels into electrical power.
Power One, which last year raked in sales of around $1.0 billion, employs some 3,300 people, including in China, the United States, Italy and Slovakia. "Solar PV is becoming a major force reshaping the future energy mix," ABB chief executive Joe Hogan said in the statement.
He maintained that with its acquisition of Power One, his company would become "a global player" in the sector, which is expected to balloon by 10 percent each year until 2021, according to the International Energy Agency. Following the news, ABB shares jumped 1.1 percent to 20.15 Swiss francs in late-morning trading on the Swiss stock exchange, while the SMI index was up 0.67 percent.
Sarasin Bank analyst Martin Schwab said the price of the acquisition seemed a bit high, offering Power One a premium of 57 percent on its closing price Friday, but felt that the deal could pay off in the future. "In light of the currently fierce competition in the solar market, the acquisition is more of a strategic move to secure ABB's technology exposure to smart grids applications," he said in a research note.
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