Sunways Soars as China’s LDK Bids for German Solar Company

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Sunways AG, a German solar-cell and module maker, jumped to a seven-week high in Frankfurt after China’s LDK Solar Co. said it intends to buy the company.

Sunways rose 21 percent to 1.87 euros a share, the highest price since Nov. 14, at the 5:30 p.m. close. The Konstanz-based company said LDK Solar will acquire a 33 percent stake and offer to purchase the remaining stock at 1.90 euros a share. Sunways has a market value of 21.6 million euros ($27.9 million).

LDK, China’s second-largest panel maker, “will buy a company with a well-known brand, decent technology and established sales channels for little money,” Stefan Freudenreich, an analyst with Equinet Bank AG, said by phone from Frankfurt. “Sunways has come under financial pressure and it may have had no alternative than selling to LDK, with which it has cooperated for years.”

Solar-energy companies in Germany, the world’s biggest market for the industry in 2010, have been struggling with falling demand while competition from abroad has risen. Added capacity at Chinese manufacturers has contributed to a prices slump, tipping Germany’s Solar Millennium AG, a project developer, and panel maker Solon SE into insolvency in December.

Separate Identities

LDK, based in Xinyu, and Sunways plan to complete the transaction by the end of the first quarter and the German manufacturer will remain a listed company under its own brand, they said today in a separate statement. LDK said it’s “convinced of the Sunways products and business model.”

The Chinese company is unlikely to keep Sunways’ solar-cell production plants in the long run amid global overcapacity, though it may develop new cell technology in Germany and expand the company’s solar inverters business, Freudenreich said. Solar inverters are devices that connect electricity generated by solar panels to the transmission grid.

“This is the first Chinese company grabbing German inverter technology,” Freudenreich said. “With LDK’s help, Sunways may be able to sell inverters in growing markets such as China and the U.S.”

Robert Bosch GmbH said on Dec. 21 that it bought Conergy AG’s solar inverters unit, putting the Stuttgart, Germany-based car-parts maker, the world’s biggest, into competition with established suppliers including Germany’s SMA Solar Technology AG and Power-One Inc. based in Camarillo, California.

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