Thursday, April 28, 2011

Total To Take Controlling Interest in SunPower


Total, mostly known for its oil and gas operations, announced that it will try to buy a controlling interest in SunPower, the maker of high efficiency solar modules.
Under terms of the deal, Total will, through a subsidiary, launched a tender offer to...

Total, mostly known for its oil and gas operations, announced that it will try to buy a controlling interest in SunPower, the maker of high efficiency solar modules.


Under terms of the deal, Total will, through a subsidiary, launched a tender offer to buy up to 60 percent of SunPower's Class A shares and 60 percent of the Class B shares for $23.25 a share. It represents a 46 percent premium over the current price of SunPower's A shares as of April 27 and 49 percent premium over the B shares. Total will also issue $1 billion in credit to SunPower.


If all goes well and the transaction goes through, SunPower will continue to operate under its current management.


In all, it will cost Total around $2.3 billion.


The deal likely answers one of the most-asked questions in the solar industry: what happens to SunPower. The company produces some of the most efficient solar panels on the market. It is also historically been one of the most nimble companies when it comes to tweaking its strategy to capitalize on changing circumstances. SunPower, along with First Solar, was one of the first to aggressively pursue utility-scale projects and to develop its own solar parks.


Recently, when it found itself approaching the efficiency wall, SunPower launched an effort to develop an inexpensive solar concentrator.


On the other hand, SunPower has been attacked from below by Asian competitors who have steadily cut the price of solar. Price erosion has made SunPower one of the more prominent acquisition targets. (At the same time, its ability to adopt new strategies has also made it one of green tech's prime acquirers.)


Total also represents one of the more unusual and unexpected trends in green technology: the rise of France. Schneider Electric has bought five companies in recent months to expand its portfolio. Saint-Gobain, mirror maker to Louis XIV, invested $80 million into smart window maker sage. Areva, the French nuclear giant, bought solar thermal company Ausra last year.






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