China Sunergy (CSUN) Buys 2 Solar Module Manufacturers for $47 Million

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09:40:56 am on March 18, 2010

China Sunergy just announced the purchase of 2 solar module manufacturers, CEEG (Shanghai) Solar Science & Technology Co., Ltd and CEEG (Nan Jing) New Energy Co., Ltd, for a total price of approximately $47 million. The company is funding the transaction on its own, and will pay for the acquisitions in a series of installments.

CEEG (Shanghai) Solar Science & Technology produces 150 MW per year and is increasing capacity to 300MW by the middle of the year. CEEG (NanJing) New Energy is currently at 70 MW but is expected to be at 170MW later this year.  Both companies were controlled by China Electric Equipment Group Co., Ltd, which in turn is controlled by China Sunergy’s chairman.

In a press release, Mr. Lu Tingxiu, Chairman of China Sunergy, commented on the decision to purchase the manufacturers:

“These acquisitions enhance China Sunergy’s position in the downstream photovoltaic market and advance our initiative of developing into a comprehensive solution provider and providing value-added services to customers…Being vertically integrated will help to stabilize and increase margins in a possibly volatile environment, while representing a transformation towards a solution provider. We are reshaping the company from a single dimension manufacturing-oriented business into a platform with two pillars: technological innovation and a closer distribution channel to end customers. This acquisition will also positively impact China Sunergy’s customer composition, as we can further focus on providing value-added services to system installers and integrators.”

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