Hanwha Solar to Merge SolarOne With Q Cells in $1.2 Billion Deal

South Korea’s Hanwha Solar Holdings is merging its U.S.-listed photovoltaic manufacturing affiliate with Hanwha Q Cells Investment Co. Ltd in a deal that values the combined company at $2 billion including debt.

Hanwha SolarOne Co. will acquire Thalheim, Germany-based Hanwha Q Cells for $1.2 billion in stock, according to an e-mailed statement today.

“We see us leading the consolidation,” said D.K. Kim, SolarOne’s chief commercial officer, in an interview. “Unless you have economies of scale, and sufficient balance sheet, it will be harder to compete.”

Hanwha Solar is merging its solar cell businesses amid government disputes over Chinese solar panel imports into the U.S. and the European Union. The U.S. is investigating alleged below-cost sales, a practice known as dumping, and subsidies. Canada last week said it started anti-dumping and anti-subsidy investigations into some photovoltaic modules and laminates imported from China. The EU has moved to curb Chinese solar panel imports.

Q Cell’s manufacturing operations in Malaysia are “free from further trade disputes,” Kim said. “The anti-dumping issue creates significant opportunities for a geographically diverse company.”

Hanwha Solar owns Q Cells and holds 45.7 percent of Hanwha SolarOne. The company is wholly owned by Hanwha Chemical Corp., which is in turn 37 percent controlled by Hanwha Group, according to data compiled by Bloomberg. Hanwha Group acquired Q Cells out of insolvency in August 2012.

Under the proposed transaction, Hanwha SolaOne will issue 740.2 million American depositary shares to buy Q Cells. The deal is subject to approval by Hanwha SolarOne shareholders.

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