French oil and gas giant Total has thrown its hat into the solar market ring, today announcing a strategic partnership and ownership stake in SunPower, a California-based solar panel manufacturer.
Total will pay US$23.25 per share for 60 percent of SunPower's outstanding Class A&B common shares; its equity stake is valuated at $2.3 billion. The boards of both companies have approved the transaction.
SunPower’s existing management team will continue to run the business, and SunPower will receive $1 billion in credit support from Total over the next five years. The funds will be used to ramp up SunPower’s commercial development and power plant businesses.
Total’s partnership with SunPower is also very strategic: Chinese solar manufactures including Suntech, Trina and Yingli have been investing heavily in U.S. companies.
SunPower is well established in the market: it had a production capacity of 580 megawatts in 2010. Total also gains the network of over 1,500 dealers SunPower has established in commercial and residential markets, as well as access to its research scientists.
SunPower has sold 1.5 gigawatts worth of installations since it began operating in the 1970’s. The company has a worldwide presence in Asia, Australia, Europe, and North, which will now be amplified by Total’s massive global reach.
"Total's commitment and global presence will help accelerate our growth and solidify our position in the increasingly competitive solar sector," said Tom Werner, SunPower's CEO.
"With Total's $1 billion credit support agreement, solar research and development investments and the other resources available through its global network, we have taken the next step in positioning our business for continued growth and long-term success.”
The company has also been the recipient of loan guarantees from the U.S. Department of Energy (DOE). Early this month, the DOE granted a $1.187 billion loan guarantees for the 250-megawatt California Valley Solar Ranch that is being jointly built by SunPower and NGR Solar.
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DOE shines $1.2 billion on a new solar plant
SunPower CEO: Developing markets abound for solar
This post was originally published on Smartplanet.com