Solar company Tongwei is planning to buy a controlling stake in competitor Runergy for about 5 billion yuan ($697.78 million) in a move that would allow the Chinese company to gain presence in the United States.
The company is looking to acquire at least 51% of Runergy via a capital boost and share purchase, Tongwei said in a filing with the Shanghai stock exchange late on Tuesday.
Runergy, which is building a 5 gigawatt (GW) solar module plant in Huntsville, Alabama, is among Chinese solar firms setting up shop in the U.S. to take advantage of clean energy manufacturing subsidies under the 2022 Inflation Reduction Act.
Chinese companies are largely locked out of exporting from China to the United States, a higher-margin market, because of tariff barriers.
Analysts have said that they expect consolidation in China’s solar manufacturing, which has faced growing overcapacity, mounting losses and calls by regulators to limit investment in new production.
Runergy has 57 GW of solar cell and 13 GW of module production capacity, according to the filing with the stock exchange. Tongwei was the fifth-largest Chinese shipper of solar modules during the January-June period, InfoLink Consulting said.
Tongwei reported a net loss between 2.2 billion yuan and 2.5 billion yuan in the second quarter, according to the company’s preview of its first-half results.
Reuters
