SMA Solar Technology AG and Danfoss A/S have today signed a contract to enter into a strategic partnership that will form one of the worlds largest converter alliances.
Following the announcement of such plans in February, Danfoss will acquire 20% (6.94 million to be exact) of SMAs outstanding shares at a share price of 43.57 and sell its entire inverter business to SMA in a move that both companies hope will strengthen their competitive advantage in the market. The cash obligation corresponds to a premium of 21% based on the volume-weighted average share price over the past 60 days prior to the May 27 cutoff date. In total, the transaction volume is calculated at 302.38 million.
All necessary antitrust approval has been granted by the appropriate authorities, and once the transaction is complete, SMAs founders, trusts and families will hold 54.95% of the company shares. Danfoss will be locked-out from purchasing further SMA shares for at least two years.
SMA CEO Pierre-Pascal Urbon remarked that the partnership is a response to a fiercely competitive market over the past few years, adding that Danfoss had focused its strategy accordingly on cost reduction brought about by the pursuit of global procurement opportunities and technological innovations.
"We will benefit from this experience and from economies of scale, thereby strengthening our leading position in the global PV market," Urbon said.
Niels Christiansen, CEO and president of Danfoss, added: "This strategic partnership is economically attractive to both companies. Together with SMA we will form one of the worlds largest inverter alliances. In the coming years, Danfoss will certainly benefit from the polled purchasing power and high growth rates of the solar industry. The procurement synergies are expected to save both companies double-digit millions of euros annually, starting 2015.
"Furthermore," he concluded, "with our 20% stake in SMA we want to continue our involvement in the solar sector and participate in the mid- and long-term positive growth potential in that sector."
Tangible evidence of the companies collaboration will be on show at next weeks Intersolar Europe exhibition in Munich, where SMA will present the MLX inverter, which was developed by Danfoss for medium-sized PV systems.