Shunfeng International Clean Energy Ltd., the Hong Kong-based solar company controlled by billionaire Zheng Jianming, agreed to acquire a majority share of U.S. solar manufacturer Suniva for $57.8 million.
Shunfeng intends to integrate Suniva’s high-efficiency products into its own and expand into the U.S. market, the Changzhou, China-based company said Thursday in a statement announcing the deal.
The company, which will own 64 percent of Suniva, has been expanding production capacity as it seeks to become the world’s biggest renewable energy provider, including the portfolio of companies owned by its parent, Asia Pacific Resources Development Investment Ltd.
“We wanted something that could move quickly and maintain the U.S. brand,” Chief Executive Officer Eric Luo said in an interview. “The U.S. has always been considered a strategic market.”
After the acquisition, both sides have agreed to expand Suniva to 1 gigawatt in capacity, Luo said. He sees the U.S. market growing to 7 gigawatts to 8 gigawatts a year, up from 6.2 gigawatts last year.
In June, Luo said the company was considering an acquisition in North America to expand the solar production capacity of its Wuxi Suntech Power Co. unit. Suniva has a factory to produce solar cells and modules at its headquarters in Norcross, Georgia, and opened a new factory in Saginaw Township, Michigan.
With the acquisition, Shunfeng gains a foothold in the U.S. without being subject to the tariffs and duties imposed on solar panels and cells made in China, said Jade Jones, analyst at GTM Research in San Francisco. “It will help the company penetrate the U.S. market in a way that it doesn’t have access to now.”
Other solar manufacturers are opening sites overseas to avoid U.S. trade barriers. Trina Solar Ltd., the world’s largest solar panel manufacturer, is building a plant in Thailand and JinkoSolar Holding Co. opened one in Malaysia.
The portfolio of Shunfeng’s parent includes energy storage companies Boston Power and Powin Energy, electric vehicle maker GreenWheel EV and light-emitting diode chip maker Lattice Power Corp. Lattice joined a group of investors that bought 80 percent of Royal Philips NV’s LED light bulb business in April.
Zheng, is a Hong Kong property tycoon who has built a group of Chinese solar manufacturing assets worth about $20 billion.
Suniva’s current investors will retain ownership in the company, including Warburg Pincus, New Enterprise Associates Inc., Goldman Sachs Group Inc.
©2015 Bloomberg News
Lead image: Suniva Installation on a Whole Foods in Austin, Texas. Credit: Suniva.