China firms plan to acquire Europe-based solar peers
As solar firms in Europe suffer financial losses due to lack of competitiveness against China-based solar firms,according to a June 3 article by The Financial Times,China-based energy group,Hanergy,has made plans to acquire a part of Germany-based solar cell firm Q-Cells.
The acquisition is for Hanergy to buy Solibro,a Q-Cells subsidiary which specializes in producing thin-film solar panels.According to the report,this will put Hanergy in direct competition with industry leading US-based First Solar.
Despite the fact that China is the leading country in producing solar products,the solar industry in China lacks sufficient technology to produce thin-film solar products.
This acquisition is likely to open up a new market for China-based solar firms.
LDK,a China-based large-size vertically integrated solar firm,announced plans to acquire Germany-based panel maker Sunways earlier this year,according to the report.
It is possible that more and more of this type of acquisition will happen.Solar firms around the world have been trying to secure stable distribution channels.However,the economic problems in Europe have been causing a shortage of funds for the renewable energy sector.Searching for financial capital has become a top priority.
Even China-based solar firms have been drowning in debt.According to LDK's fourth-quarter 2011 financial report,the debt ratio shot up to 87.68%.Another tier-one solar firm in China,Suntech,currently has a debt ratio of 65.34%according to its first-quarter 2012 financial report.
Hence despite the fact that there seems to be a trend of China-based firms taking over Europe-based peers,the firms in China have been experiencing financial problems of their own.
