[ACCESSWIRE]
LONDON, UK / ACCESSWIRE / September 21, 2016 / Active Wall St. blog coverage looks at the headline from SunPower Corporation (NASDAQ: SPWR) as the company announced on September 20, 2016 that it is acquiring AU Optronics Corp.'s (NYSE: AUO) share of the Melaka, Malaysia based joint venture company that manufacturers solar cells. Register with us now for your free membership and blog access at: http://www.activewallst.com/register/.
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The buyout
As per terms of the agreement, SunPower will purchase AUO's share in the Melaka unit for a sum of $170 million. The amount will be paid to AUO over the next four years. On finalization of the deal, SunPower will gain full control of the entire unit. The transaction is expected to close by end of September 2016, subject to fulfillment of various conditions.
The transaction is said to end the dispute between the two companies; however the nature and reason of the dispute were not disclosed.
Along with this, SunPower has also signed a supply agreement, wherein it will supply 100 MW of E-series solar photovoltaic (PV) panels to AUO. AUO will continue to be the supplier for solar wafers.
Commenting on the acquisition, Tom Werner, SunPower President and CEO said:
"Acquiring AUO's stake in the Malaysian joint venture gives us sole control over our highest performing solar cell fab and will allow for technology upgrades and further expansion of our high efficiency solar cell technology as market conditions warrant. Consistent with our previous comments, SunPower is working to increase our future manufacturing capacity for our highest-value products while driving down costs. Purchasing AUO's portion of the Melaka joint venture is an opportunity for us to enable technology upgrades, cost reductions and future expansion consistent with this strategy."
About the Melaka unit and Future plans
AUO SunPower Sdn. Bhd. is a $ 1.2 billion joint venture between AUO Optronics Corp. from Taiwan, a leader in TFT LCD industry, and SunPower Corp., a US leader in Photo Voltaic industry. Both companies contributed $350 million towards equity and own 50% share in the company. It was established in May 2010 and has been fully operational since July 2011. The plant has the capability to produce approximately 1400 megawatts of solar cells which offers efficiencies of approximately 22.5%, or about 3.4 watts per cell. The fully planned capacity of the unit is 1.4 Gigawatts.
SunPower plans to eventually upgrade the Melaka facility, so that it is geared up for significant future capacity growth. SunPower in August 2016 had announced that it had decided to shut down its panel assembly facility in Philippines and transfer the equipment to Mexico. This decision was part of its plan to realign its manufacturing operations and cut its workforce by 15%, i.e. nearly 1200 job cuts at the facility.
Stock Performance
SunPower shares which have been on a downward swing for the last one year, traded up 4.34%, closing Tuesday's session at $8.17 on volume of 3.12 million shares, which was higher than the 3 months average volume of 2.95 million shares. Shares of the company have a market cap of $1.16 billion as of yesterday's close.
AUO's shares, on the other hand, have been on an upward swing. The stock was up by 2.75%, finishing at $3.73 at the close of session on September 20, 2016. Approximately 611.5 thousand shares were traded on the day. AUO's shares have advanced 28.18% since the beginning of 2016.
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SOURCE: Active Wall Street
