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Hamburg, Germany / Seoul, Korea – LG Electronics (LG), a global leader and technology innovator in consumer electronics, and Conergy AG, the leading Photovoltaic (PV) solution provider, announced that they have signed a memorandum of understanding to form a joint venture in the solar module manufacturing business. LG would acquire a 75 percent stake in Conergy’s solar module plant in Frankfurt (Oder), under the deal, and Conergy would retain 25 percent. The plant is currently in the ramp-up phase. LG and Conergy project that their partnership would get underway by the end of this year.
LG will bring to this deal its extensive R&D knowledge, including several years of R&D in various photovoltaic technologies. LG will also leverage its leading expertise in mass manufacturing from similar industries such as flat panel displays. Conergy, as the leading PV solution provider, will provide the joint venture with unparalleled access to the market through its distribution franchise that spans across over 20 countries on five continents.
The solar industry presents an exciting new growth platform for LG. With its superior technology and competitive manufacturing, LG plans to become a global leader in the solar industry. The joint venture with Conergy provides LG a unique opportunity to make a swift and effective entry into the solar industry, with a leading downstream company as its partner.
"This is an opportunity for us to take the lead in the solar technology market right from the start. 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," said Kwan Shik Cho, head of the Solar Cell Business Team at LG Electronics. "In addition, this partnership provides us with the strategic advantage in that we gain Conergy – the leading global downstream player – as a long term partner."
For Conergy, the joint venture is a step further on its road to becoming a focused downstream company. The Strategic partnership would also secure Conergy’s technological lead and future supply of solar modules and help pave the way to profitable growth.
"In taking this step, we have created the opportunity for a long-term partnership with LG Electronics. This strategic alliance will also help us further develop into a leading provider within the photovoltaic market," said Dieter Ammer, CEO of Conergy. "This would also mean moving significantly further in our realignment program, with a clear focus on downstream activities."
In November 2006, Conergy started construction of its plant in Frankfurt (Oder), which ranks among the most modern of its kind and employs more than 400 staff. Conergy will supply the plant with silicon deliveries and will take over the principal role of future marketing of the modules.
The MOU is non-binding. Signing of the transaction is subject to satisfaction of certain conditions and closing is anticipated by year end. Morgan Stanley is advising LG Electronics and Jefferies is advising Conergy in the transaction.
About Conergy
Since its founding in 1998, Hamburg-based Conergy AG has sold more than a gigawatt in renewable energy, making it one of the biggest European suppliers of solar energy and other renewable energies, and a world leader in solar system integration. Of the one gigawatt in renewable energies, Conergy has installed more than 400 megawatts in its major projects, Of the total one gigawatt, 200 megawatts falls to its wind energy park projects and 800 to its globally marketed solar modules. According to the German Solar Industry Association (BSW) this is just under a fifth of the entire installed photovoltaic output in Germany. Calculative one in ten modules worldwide was produced, sold or installed by Conergy.
Listed on the Frankfurt Stock Exchange since 2005, the group pursues a global growth strategy, The company now produces, installs and designs solar power systems and wind turbines in around 20 countries. The Conergy Group is represented with its own branches on five continents.
About LG Electronics, Inc.
LG Electronics, Inc. (KSE: 066570.KS) is a global leader and technology innovator in consumer electronics, home appliances and mobile communications, employing more than 82,000 people working in 114 operations including 82 subsidiaries around the world. With 2007 global sales of USD 44 billion, LG is comprised of four business units - Mobile Communications, Digital Appliance, Digital Display and Digital Media. LG is the world’s leading producer of mobile handsets, flat panel TVs, air conditioners, front-loading washing machines, optical storage products, DVD players and home theater systems. For more information, please visit www.lge.com.
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DISCLAIMER:
This communication is neither a prospectus nor does it constitute an offer to sell or the solicitation of an offer to purchase the shares or other securities of Conergy AG and it does not substitute the prospectus. Subject to the approval by the German Financial Supervisory Authority a securities prospectus will be published prior to the offer period and made available free of charge by Conergy AG and the coordinators. The shares will be offered exclusively on the basis of the prospectus required to be approved by the German Financial Supervisory Authority.
This communication is not an offer of securities for sale in the United States of America. Securities may not be offered or sold in the United States of America absent registration or an exemption from registration under the U.S. Securities Act of 1933, as amended (the "Securities Act"). Any public offering of securities to be made in the United States of America will be made by means of a prospectus that may be obtained from Conergy AG and that will contain detailed information about the company and management, as well as financial statements. Conergy AG does not intend to register any part of the offering in the United States.
The information contained in this communication is not for publication or distribution in or into the United States of America, Canada, Australia or Japan and does not constitute an offer of securities for sale in the United States of America, Canada, Australia or Japan. |