Auto Giants Cuddle Closer to Ballard Fuel Cells

A major move to commercialize fuel cell use may result from a deal between DaimlerChrysler AG, the Ford Motor Company and Ballard Power Systems, the Canadian fuel cell developer.

VANCOUVER, British Columbia, CA, 2001-10-12 [] Under the transaction, which its expected to complete in November, the transportation alliance formed by Ballard, XCELLSIS and Ecostar will be consolidated to create an integrated fuel cell systems business. Ballard will acquire XCELLSIS (the fuel cell engine subsidiary of DaimlerChrysler) and Ecostar (the electric drive train and power conversion system subsidiary of Ford), in return for a total of Ballard common shares valued at US$348 million. DaimlerChrysler and Ford will each also purchase a total of $34 million in Ballard common shares for cash. The transaction will take place in two steps – one at closing and the remainder prior to December 2004. At that time, DaimlerChrysler and Ford equity ownership of Ballard will be increased to 23.6 percent and 19.5 percent, respectively, from the current 19.3 and 14.5 percents. The acquisition expands Ballard’s business beyond its world leadership in proton-exchange membrane fuel cell components to include complete fuel cell systems for portable, stationary and transportation markets. It will advance Ballard in power conversion systems for fuel cell, microturbine, internal combustion engine and renewable-based power sources, as well as a leader in electric drive systems. Ballard is acquiring both XCELLSIS , which develops PEM fuel cell systems for vehicles, and Ecostar, which develops electric drive trains and power conversion systems for a variety of applications. The transaction increases the commitment of DaimlerChrysler and Ford to the development of fuel cell powered vehicles and to Ballard as their supplier of fuel cell systems. The transaction enhances Ballard’s capability to supply automakers other than DaimlerChrysler and Ford with a full range of fuel cell power train components, including other current customers such as Honda, Nissan, Mazda and Volkswagen. “The benefits of integrating the three companies into one include organizational streamlining and rationalization that will bring cost efficiencies, faster decision-making and accelerated product development cycles,” says Ballard chairman Firoz Rasul. DaimlerChrysler has invested US$1 billion in fuel cell research and has built ten fuel cell vehicles either as concept cars or test vehicles, each one powered by Ballard fuel cells.
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