Solar inverter market annual growth rate of more than 10%

Swiss industrial group ABB will be about $ 1 billion to acquire solar enterprises Power-One to bet on emerging markets growth revival due to overcapacity and a drop in demand of the European market is raging departments.

The world's largest industrial electric motors and power grid supplier, said it has agreed to pay $ 6.35 per share in cash to the Power-One, which is the world's second-largest solar inverter manufacturer.

This offer represents a 57% premium to Friday's closing price of Power-One, though far below the 2010 high of 13 U.S. dollars / share. ABB said the growing energy demand (especially in emerging markets), rising electricity prices and the decline in the cost of pulling the small solar panels inverter market is expected to 2021 the annual growth rate will exceed 10%.

According to the report released by market research firm IHS solar inverter industry in 2012 total revenue of $ 7,000,000,000. Vontobel analyst said: "We believe that ABB timely expansion of its portfolio of solar products, the acquisition of Power-One is a very wise strategy." Recently, competitors, Germany's Siemens and Bosch joint venture shutting down the solar energy industry because nothing more than an oversupply of solar panels collapse in demand caused by the weak global economy and the reduction of government subsidies and prices have fallen sharply.

The world's largest inverter manufacturer SMA Solar, Germany recently reported 2012 operating income decreased by 58%, said the the competitors continued low-cost strategy will seriously damage its business. However, ABB said that the decline in the price of solar panels for sale power generation system and the rising cost of power means that the solar panels to become a competitive source of energy. The ABB Global Discrete Automation and Motion Control the business department Ulrich said: "Solar energy is the fastest growing renewable energy generation, we believe that this market Spiesshofer."

Spiesshofer the the ABB acquisition in this market, the reason is because it sees demand for solar power is transferred to emerging markets such as China and the Middle East market. "Some traditional markets, such as Japan, are also awakening to develop solar." Renewable energy is one of ABB's strategic focus. In 2011, the company acquired 35% of the shares in Germany Novatec Solar.

The day of the announcement, ABB shares rose 0.9 percent to 20.1 Swiss francs. SMA shares rose more than 10%. ABB CEO Joe Hogan said that the transaction should be able to increase net income. In addition, Hogan also revealed ABB intention to acquire the solar panels or equipment manufacturers. Sarasin analysts said the price seems a bit high, but the deal could generate profits in the future. Vontobel analysts said, the price is reasonable in view of the acquisition of the Target net cash position and positive cash flow from operations.