Vivint Solar, the U.S. rooftop solar installation company, has today announced that it has terminated a merger agreement with clean energy company SunEdison following what it claims was a "willful breach" of the agreement by the solar giant.
SunEdison, which has been fighting a number of fires on many fronts in recent weeks, today received a letter from Vivint notifying the company of its failure to meet its obligations set out in the terms of the merger agreement, particularly in relation to SunEdisons failure to consummate the merger when required pursuant to the terms of the contract.
Vivint shareholders in February approved the SunEdison acquisition, which had rumbled on for more than six months. The approval in February was voted for overwhelmingly, by 100 million votes for and just 101,000 against, making todays termination of the agreement somewhat surprising.
In December, Raj Prabhu, Mercom Capital CEO, remarked that the $1.9 billion acquisition despite its delays and wranglings was something of a formality, particularly in light of the ITC extension announced shortly afterwards.
However, amendments to the original merger agreement were sought and approved late last year, and these served to open the back door for the possibility of a cancellation. The renegotiated terms meant that Vivint Solar would be allowed to solicit and negotiate with other potential buyers prior to approval of the merger, with its penalty for reneging on the deal lowered from $62 million to $34 million.
The shareholders approval was considered the final hurdle, but the Vivint Solar letter sent today to SunEdison confirming the deals cancellation added that it intends to "seek all legal remedies available" as a result of the "willful breach" of the merger agreement.
More to follow