ABB Ltd has entered into an agreement with Power-One Inc for the latter's acquisition for a sum price of US$1 billion. This gives ABB, the world's largest electricity networks builder with inverters that would allow solar power generated electricity to be fed into its grids.
As part of the purchase price, the Camarillo, CA based inverter manufacturer's shareholders would be receiving US$6.35 per share. Because of the deal, the shares of Power-One jumped by as much as 59% to US$6.34 at the German bourse.
ABB is seeking to hedge on forecasts in an industry expected to have an annual growth of at least 10% per year. The growth is fueled by the increasing demand for low cost energy and the falling prices in solar power investment and production.
According to ABB CEO Joe Hogan, there is some risk involved in the acquisition of Power-One because of the 'tumultuous' renewable energy market. He is predicting the company's bet would begin to pay off as the costs of producing solar energy comes nearer to the purchasing power of the grid.
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