Hanwha SolarOne To Buy Q CELLS From Hanwha Solar Holdings In All-stock Deal

(RTTNews) - Hanwha SolarOne Co., Ltd. (HSOL) agreed Monday to acquire Hanwha Q CELLS Investment Co., Ltd. from Hanwha Solar Holdings Co., Ltd. in an all-stock deal that will create the world's largest solar cell manufacturer valued at about $2 billion. The implied equity value for Hanwha Q CELLS is about $1.2 billion.

The deal, approved by the board of directors of both companies, expected to close in the first quarter of 2015, primarily subject to regulatory and Hanwha SolarOne shareholder approvals. The company has resolved to recommend that SolarOne's shareholders vote to approve the deal.

"The combination of SolarOne and Q CELLS creates a formidable global leader that is well positioned for long-term growth. Q CELLS brings industry-leading technology and R&D that can be leveraged across the combined product portfolio, and downstream expertise in development, EPC and project financing. Hanwha SolarOne CEO Seongwoo Nam said in a statement.

The deal will see Hanwha SolarOne will issuing about 3.7 billion Hanwha SolarOne ordinary shares or about 740.2 million American depositary shares or ADS, to Hanwha Solar in exchange for 100 percent outstanding shares of Hanwha Q CELLS. Each of SolarOne's ADS represents five ordinary shares of SolarOne.

The closure of the deal will result in Hanwha Solar increasing its ownership of SolarOne from about 45.7 percent to about 94 percent, in consideration for the transfer of full ownership of Hanwha Q CELLS to Hanwha SolarOne.

Hanwha SolarOne, one of the world's largest solar wafer, cell and module makers, has a cell and module production capacity of 1.75 and 2.07 gigawatts, respectively.

Hanwha Q CELLS is the largest supplier of photovoltaic product solutions in Europe. It was acquired by Hanwha Group in 2012. It has a cell and module manufacturing capacity of 1.53 gigawatts and 130 megawatts, respectively.

For the six months ended June 30, 2014, the total pro forma revenue for the two companies was about $733 million.

The combined entity will be the largest manufacturer of solar cells with capacity of 3.28 gigawatts. It will also have a broader international footprint covering the largest and fastest-growing solar markets in the world. The combination of complementary businesses will see the unlocking of revenue and cost synergies.

Hanwha SolarOne said it intends to leverage its cost-efficient module manufacturing base together with Q CELLS' industry-leading highly efficient and fully automated cell manufacturing knowhow to further improve the combined company's cost competitiveness and expansion in key geographies.

The combined company will have stronger market positions in the key solar markets of the U.S., China, Japan and Europe.

The combined entity will have its executive headquarters in Seoul, Korea, and its technology and innovation headquarters in Thalheim, Germany. The company will be led by Seongwoo Nam as chairman and CEO, while DK Kim will serve as chief commercial officer, Jinseog Choi will serve as chief technology officer and Jay Seo will be the CFO.

"The merger with SolarOne creates a truly global platform that will provide us with a platform to achieve greater economies of scale and facilitate expansion into important solar markets including China. Together with SolarOne, we look forward to delivering superior solar solutions to our customers and growing our global leadership position," Q CELLS CEO Charles Kim stated.

HSOL closed Friday's regular trading session at $1.62, up $0.03 on a volume of 0.59 million shares.