LG eyeing solar inroads through EU’s Conergy

Sept. 15, 2008 – Korean electronics conglomerate LG Electronics wants a piece of the solar pie, too — and maybe a leg up on domestic rival Samsung. The company says it is negotiating a 75% stake in a solar module JV with German solar company Conergy AG, for a reported pricetag of $181M.

What LG says it brings to the party is its own R&D know-how “in various photovoltaic technologies” and “competitive manufacturing” (i.e. mass production capabilities) that it’s learned from its work with LCDs and other industries. Conergy, meanwhile, will offer global market distribution and be allowed to focus on the downstream part of the market. The partnership will focus on a solar module plant in Frankfurt-an-der-Oder begun in 2006; Coneregy will supply silicon deliveries and future marketing of the modules.

“This is an opportunity for us to take the lead in the solar technology market right from the start,” said Kwan Shik Cho, head of LG’s solar cell business unit, in a statement.
“Contributing our technology and operational expertise to the joint venture allows us to enter the industry much faster and with better valuations than would simply acquiring a standalone solar module manufacturer”

Analysts suggest the deal could bolster Conergy’s cash flow (losses have tripled Y-Y) and stock price, which has stumbled this year. The company has been tossing off other solar units in an attempt to narrow its scope downstream, including solar-thermal production facilities. It also renegotiated and cut in half its silicon supply deal with MEMC.


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