Acquisition to Give Suntech Extensive PV Module Sales & Distribution
Network in Key Japanese Market
WUXI, China, Aug. 2 /Xinhua-PRNewswire/ -- Suntech Power Holdings Co., Ltd.
(NYSE: STP), one of the world's leading manufacturers of photovoltaic (PV)
cells, announced today that it has signed a definitive agreement to acquire
MSK Corporation in a two-step cash and stock transaction. In the first step
of the acquisition, which is expected to close in the third quarter 2006,
Suntech will acquire a two-thirds equity interest in MSK for $107 million
through a combination of subscription to new shares and purchase of existing
shares. The balance of the consideration is based upon revenue targets for
MSK and will be paid in the second step, which is anticipated to close by the
end of 2007.
''While Japan is the world's largest single market for PV modules, it is
also one of the most difficult markets for foreign players to enter,'' said Dr.
Zhengrong Shi, Suntech's Chairman and CEO. ''We anticipate that this
acquisition will give Suntech the advantage of MSK's nationwide sales and
marketing platform in Japan, which we expect to leverage to grow our market
share in this important market.''
Based on the 2006 Photovoltaic System Market Future Outlook Report, Japan,
Japan is the most important market for solar energy in terms of both total
installation and production of solar cells and modules with 53% of world
production. The report also states that Japan is one of the fastest growing
markets in the world posting 48% annual growth in 2005 in the production of PV
cells and modules.
MSK Corporation is one of Japan's largest PV manufacturers and one of the
top-ranking companies in the building-integrated photovoltaics (BIPV) space.
MSK provides customer-tailored PV products that give aesthetic finish to a
building by replacing the conventional building materials. In addition, MSK
provides turnkey solutions to its clients. Its services range from pre-system
preliminary studies through to post-installation commissioning and maintenance.
With more than 20 years of experience and good brand name in the PV
business, MSK currently has approximately 260 employees, leading technical
expertise and one of the world's largest PV module manufacturing plants with a
production capacity of approximately 100 megawatts in Nagano, Japan. In 2005,
MSK had annual production capacity of approximately 200 megawatts.
''Through this acquisition, Suntech will also gain the advantage of MSK's
leading BIPV product and solar system design capability,'' continued Dr. Shi.
''This acquisition will bring two important companies in different PV sectors
together and we anticipate that it will result in great synergies. It will
enable us to accelerate innovation, bring to market new PV solutions that
complement our existing product range, and capture new opportunities within
the fast growing BIPV market.''
Dr. Tadao Kasahara, CEO of MSK, said, ''MSK looks forward to continuing to
provide commercial and industrial solar solutions to Japan and markets in
other parts of the world with both advanced building integrated photovoltaics
(BIPV) and other high-quality PV products. As a subsidiary of Suntech, MSK
will be able to access Suntech's support in terms of advanced PV cell/module
products and cost competitiveness, financial resources, and distribution
channels, as well as have the possibility of pioneering BIPV applications in
the Chinese market.''
Suntech expects that MSK's global sales footprint, established branding
and international marketing expertise will further Suntech's strategy of
diversifying its customer base and developing sales channels in key
international markets. MSK's CEO, Dr. Tadao Kasahara, has agreed to remain in
his current role for at least four years.
Under the definitive agreement, Suntech will be acquiring MSK in two steps.
Upon closing of the first step of the acquisition, which is expected to occur
in the third quarter of 2006, Suntech will acquire a two-thirds equity
interest in MSK for $107 million in cash. Upon closing of the second step of
the acquisition, which is expected to occur by the end of 2007, Suntech will
acquire all or a substantial portion of the remaining interest in MSK for a
consideration based on MSK's ability to achieve certain revenue targets. If
Suntech acquires 100% of the remaining interest in MSK, the range of
consideration for the second step is $53 million to $193 million in the form
of Suntech shares. The first step of the transaction will be financed through
a one year bridge loan.
The transaction is subject to customary closing conditions, including
approval of MSK's shareholders. The transaction is not subject to regulatory
Credit Suisse acted as exclusive financial advisor and Simpson Thacher &
Bartlett LLP served as international counsel for Suntech on the transaction.
PT Global and Mitsubishi UFJ Securities acted as exclusive financial
advisors and O'Melveny & Myers LLP served as international counsel for MSK on
Suntech Power Holdings Co., Ltd. is a leading solar energy company in the
world as measured by production output of solar cells in 2005. Suntech
provides solar solutions for a green future. Suntech designs, develops,
manufactures, and markets a variety of high quality, cost effective and
environmentally friendly PV cells and modules for electric power applications
in the residential, commercial, industrial, and public utility sectors.
Suntech's customers are located in various markets worldwide, including
Germany, Spain, China and the United States. For more information, please
visit http://www.suntech-power.com .
About MSK Corporation
MSK is a company that specializes in manufacturing photovoltaic modules
with experience of more than 20 years. MSK provides clean energy source to
preserve human friendly environment, and is also committed to developing BIPV
(Building Integrated Photovoltaic) products that enable to create design
oriented environment for buildings. MSK is one of the top suppliers of BIPVs
to the buildings material industry. MSK has one of the most advanced
production facilities with annual capacity of 200MW, and supplies high quality
and high value added solar energy products world wide. For more information,
please visit http://www.msk.ne.jp .
Safe Harbor Statement
This announcement contains forward-looking statements. These statements
are made under the ''safe harbor'' provisions of the U.S. Private Securities
Litigation Reform Act of 1995. These forward-looking statements can be
identified by terminology such as ''will,'' ''expects,'' ''anticipates,''
''future,'' ''intends,'' ''plans,'' ''believes,'' ''estimates'' and similar
statements. Among others, statements regarding Suntech's beliefs and
expectations about the expected benefits of the acquisition of MSK, including
without limitation, the statements that such acquisition would give Suntech
the advantage of MSK's nationwide sales and marketing platform in Japan, which
may in turn be leveraged to grow Suntech's market share in Japan and other
international markets, as well as the advantage of MSK's module products and
solar system design capability, are forward-looking statements. Such
statements involve certain risks and uncertainties that could cause actual
results to differ materially from those in the forward-looking statements.
Further information regarding these and other risks is included in Suntech's
annual report on Form 20-F filed with the U.S. Securities and Exchange
Commission. Suntech does not undertake any obligation to update any
forward-looking statement, except as required under applicable law.
For more information, please contact:
Suntech Power Holdings Ltd.
Ogilvy Public Relations Worldwide
In the United States:
Ogilvy Public Relations Worldwide
SOURCE Suntech Power Holdings Co., Ltd.
/CONTACT: In China - Cindy Shao of Suntech Power Holdings Ltd.,
+86-510-8534-5000, or firstname.lastname@example.org, or Philip Lisio of Ogilvy Public
Relations Worldwide, +86-10-8520-6550 or +86-1350-1166-560, or
email@example.com; or In the United States - Thomas Smith of Ogilvy
Public Relations Worldwide, +1-212-880-5269, or firstname.lastname@example.org,
both for Suntech /
/Web Site: http://www.msk.ne.jp /
CO: Suntech Power Holdings Co., Ltd.; MSK Corporation
ST: China, Japan
IN: CPR OIL UTI
-- CNW015 --
4417 08/02/2006 08:00 EDT http://www.prnewswire.com