Chinese solar giant steps in to acquire rival in $250m swoop

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Chinese monosilicon PV giant Longi Solar has stepped in to acquire fellow manufacturer Zhejiang Yize New Energy Technology Co Ltd for RMB1.78 billion ($253 million) after Akcome walked away from a deal at the same price on Friday.

Chinese company Zhejiang Yize has 7 GW of solar module production capacity and 3 GW of cell lines in northern Vietnam, operating under the brand names Vinasolar Technology and Vina Cell Technology, respectively.

The company was established in 2014 and includes Chinese solar brands Jinko, JA Solar, GCL, REC Solar and Axitec among its industry partners as its Vietnamese facilities produce both modules which are then re-branded by those peers and also re-brands modules from those partners with the Vinasolar marque.

Previous deal

Fellow Chinese module and mounting system producer Akcome had in April announced an intent to acquire Zhejiang Yize for RMB1.78 billion with the deal including put options which would guarantee profits from the target company of RMB220 million this year, RMB241 million next year and RMB251 million in 2022. The put options were structured so that any shortfall would be made good by Zhejiang Yize and any surplus would be added to the purchase price. Longi announced on Sunday night it had assumed all aspects of the takeover, including the put options.

Longi added, however, the acquisition is only a framework deal at this stage and it hoped to complete the purchase by May “with both parties’ best efforts” and no later than the end of June, subject to due diligence, auditing and other assessments.

Chinese inverter maker and energy storage company EAST Group had attempted to acquire Zhejiang Yize in 2017 for RMB2.9 billion but that approach was terminated in March, whereupon Akcome took up the baton.

It is anticipated Longi will finance the acquisition from its cash pile given the manufacturer last month predicted a net profit of around RMB5 billion this year.