Three Taiwanese solar companies to merge
Taiwanese solar cell manufacturers Gintech Energy, Solartech Energy and Neo Solar Power are planning a three-way merger in response to the “highly competitive and increasingly concentrated market”. The companies also manufacture silicon wafers, modules, power grids and other products in the solar energy supply chain. The new entity will be called the United Renewable Energy Co. It plans to build a self-owned module brand, and enter the downstream market.
Taiwanese solar cell manufacturers Gintech Energy Corp (TPE:3514), Solartech Energy Corp (TPE:3561) and Neo Solar Power Corp (TPE:3576), or NSP, announced today their intention to merge into one company.

The three companies have signed a non-binding letter of intent (LoI) that outlines their plan to merge and build “a flourishing and prosperous integrated platform” in view of the “highly competitive and increasingly concentrated market”. In addition to the production of cells, these firms are active in the silicon wafer, module, power grid and other solar energy supply chains. For the first eight months of the year, Gintech reported TWD 9.18 billion (USD 304.7m/EUR 258m) in net sales, NSP posted TWD 5.8 billion and Solartech had TWD 4.25 billion.

None of the three merger partners will be considered as the acquiring company, while NSP has been agreed as the surviving company. It will be renamed to United Renewable Energy Co Ltd (UREC) after completion of the transaction. The plan is for UREC to become "the paragon of vertical integration" of the country's solar industry by enlarging domestic and foreign investment, building a self-owned module brand, and entering the downstream segment.

Gintech, Solartech and NSP also expect other local sector players to join the integrated platform after the planned merger.

The initial terms of the pact set the tentative share exchange ratio as follows: one common share of Gintech for 1.39 common shares of NSP; and one common share of Solartech for 1.17 common shares of NSP. This is subject to change depending on further assessment of each firm's obligations and liabilities.

The trio aims to seal a legally-binding merger agreement by the end of the year and to have the transaction completed in the third quarter of 2018.

The three companies have initiated work with relevant government agencies to secure their backing. According to a press statement, they hope to have the National Development Fund and other government-appointed organisations investing in the companies under appropriate terms and conditions.

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