Neo Solar Power and DelSolar to become major solar cell producer in merger deal

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Taiwan-based PV manufacturers, Neo Solar Power (NSP) and DelSolar are to merge, creating the largest solar cell company, on a capacity basis, in Taiwan. There had been recent media reports that Motech Industries was in talks to buy NSP.

Delta Group, a Taiwan-based power electronics and systems firm, majority (54%) shareholder in DelSolar, plans to be the majority shareholder in the combined companies and consolidate its system business into the merged entities.

Delta Group said that based on successful tender offer by NSP to acquire up to a 15% stake in DelSolar as part of the merger acquisition, the firm could participate in fund raising activities of the combined entity  to the tune of NT$1.5 billion (USD$50 million) .

According to a statement from Delta Group, NSP has a solar cell capacity of 1,300MW, while DelSolar has a cell capacity of 600M.

The newly merged entity would have a cell capacity of nearly 2GW, making it the largest solar cell manufacturer in Taiwan and second largest on a global basis.

Both companies also have limited module assembly capacity (NSP 60MW, DelSolar 180MW), which will result in a total capacity of 240MW on completion of the merger.

However, Finlay Colville, Vice President of market research firm, NPD Solarbuzz told PV Tech: “It remains to be seen what synergy is on offer, since DelSolar and NSP have very similar offerings and target customers. Right down to process flows and certain tooling used in each company’s cell lines, there is similarity.

“The economies-of-scale arguments don’t hold up today when looking at any new total capacity on offer. Using this as a platform to retire legacy tooling in each fab could allow a degree of streamlining, but short-term benefits are less obvious.  Collectively, DelSolar and NSP are on track to increase cell production in 2012 by over 30% compared to 2011 – a higher growth rate compared to expected end-market demand in 2012.”

The planned merger of NSP and DelSolar is the first attempt at consolidation within PV manufacturers based in Taiwan.

NSP has been significantly impacted by the severe decline in demand for solar cells as overcapacity became endemic in the sector in 2011. The company has recently reported monthly sales lower than those seen in 2010.

DelSolar had sales of NTD237,467,000 in October, 2012, down 61% from the same period a year ago.

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