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Neo Solar Will Acquire Delsolar

2012/11/20 | By Philip Liu

Taipei, Nov. 20, 2012 (CENS)--Neo Solar Power Corp. will acquire Delsolar, a subsidiary of Delta Electronics, at 100% via share swap and cash payment in two stages by the end of next June, thereby becoming Taiwan's largest and the world's second largest solar-cell company, announced Neo Solar yesterday (Nov. 19).

This is the first 100% merger in the history of Taiwan's solar-energy industry. Institutional investors estimated that the acquisition will cost less than NT$3 billion.

Hai Ying-chun, chairman of Delta, remarked that as a pioneer for new-energy business in Taiwan, Delta hoped the merger can trigger merger between other domestic firms in the line, thereby rectifying the imbalance of supply and demand plaguing the solar-energy industry.

Hai stressed that Delta still harbors a rosy outlook for the solar-energy industry. As a result, after the merger, Delta will become the largest shareholder of Neo Solar, with 17% stake and two seats in the seven-seat board of directors.

The merger will be carried out in two stages. In the first stage, from Nov. 20 to Dec. 14, Neo Solar will acquire 13-15% stake of Delsolar, based on the latter's closing price of NT$10.85 per share on Nov. 16, plus 5% premium. It will be carried out by exchanging 0.703 share of Neo Solar, plus cash of NT$0.5, for one share of Delsolar. The merger will be completed by the end of next June.

Delta now owns 54% interest in Delsolar, which will drop to less than 41% after share swap in the first stage. Then, Delta will own 5% stake in Neo Solar.

Share price of Neo Solar dropped NT$0.75, closing at NT$14.75 yesterday, when that of Desolar dipped NT$0.35 to NT$10.5.

Lin Kun-hsi, chairman of Neo Solar, stressed that the alliance between Neo Solar and Delta can forge a highly competitive supply chain by combining the solar-cell and module business of Neo Solar and Delsolar, as well as Delta's system business. After the merger, Neo Solar will boast total capacity of 2GW for solar cell, ranking second place worldwide.

Delta pledged that if Neo Solar needs to increase its capital within 18 months after the merger, Delta will chip in up toNT$1.5 billion, to strengthen its financial structure.