The deal comes after President Bush announced a package of energy initiatives, which includes a proposal for the largest increase in Department of Energy (DOE) funding for solar photovoltaic technologies in the department’s history. It also follows the narrow passage weeks ago of a massive solar rebate plan in California that is expected to stabilize a fertile solar business climate in the important California market.

 

"In view of the recently launched comprehensive funding program in California, the SolarWorld Group will benefit from excellent growth opportunities with this expansion, creating a global 'SolarWorld’ with production and sales representation in the most vigorously growing solar markets worldwide," said Frank H. Asbeck, chairman and chief executive officer of SolarWorld AG.

The sale and purchase agreement signed by both parties results in the transfer of the following Shell locations: Vancouver, Wash., and Camarillo, Calif., which manufacture solar silicon crystals, wafers, cells and modules; Gelsenkirchen, Germany, which produces solar cells; as well as the sales companies in Germany, Singapore and South Africa and the research and development team focusing on silicon technology based in Munich.

The Shell Solar Rural business is not included in the transaction, which will need to be approved by regulators. The companies also agreed not to disclose the financial conditions of the deal.

SolarWorld expects to continue to employ the 575 Shell staff and coupled the purchase plan with a one-year employment guarantee for all staff.

Citing the tight global market solar solar-grade silicon raw material, Asbeck said he expects lower overall production at the U.S. facilities in the short term with full capacity not coming online until 2007-2008.

Asbeck said SolarWorld’s acquistion of Shell Solar reflects a pattern of consolidation in the solar PV industry. But, he added that this could be one of the last major mergers in the international market for "the foreseeable future."

On the other hand, he said, consolidations and takeovers in the segments that require less capital and know-how of the solar power market, such as solar cell and solar module production, were likely as well as in the field of trading and research & development companies.