SMA Solar Technology and Danfoss recently signed a contract to enter into a close strategic partnership. The goal is to sustainably strengthen their cost positions through economies of scale and joint development initiatives.
According to the plans announced in February, Danfoss will acquire 20% of SMA’s outstanding shares and sell its entire solar inverter business to SMA. The necessary approval by the antitrust authorities has already been granted.
“This market has been characterized by fierce competition for many years, [and] Danfoss has focused its strategy on continuous cost reduction by using global procurement opportunities and technological innovations,” says Pierre-Pascal Urbon, SMA CEO. “We will accelerate innovation cycles through collaborative efforts in development and systematically reduce our product costs. In addition, by taking over Danfoss’s PV inverter business, SMA will be able to serve the high-growth market segment of medium-sized PV systems in Europe, the U.S. and Asia even better.”
“The procurement synergies are expected to save both companies double-digit millions of euros annually starting in 2015,” says Niels B. Christiansen, president and CEO of Danfoss. “Furthermore, with our 20% stake in SMA, we want to continue our involvement in the solar sector and participate in the mid- and long-term positive growth potential in that sector.”
As part of the cooperation, Danfoss acquires 6.94 million of SMA Solar Technology shares at a price of €43.57 per share from the SMA founders, their trusts and families. The cash consideration corresponds to a premium of 21% based on the volume-weighted average share price over the last 60 days before the cutoff date of May 27, 2014. The transaction volume amounts to €302.38 million. After the transaction’s completion, the freely tradable free float of SMA shares will be at 25.05%. The SMA founders, their trusts and families will hold 54.95% of SMA shares after the transaction is completed. Danfoss will not buy or sell any further SMA shares for a lock-up period of at least two years.
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