SunPower announced a plan Monday to separate into two companies, one focused on the downstream U.S. solar and storage market and the other on overseas PV manufacturing — with China’s Tianjin Zhonghuan Semiconductor to invest nearly $300 million into the newly formed manufacturing group.
SunPower itself will remain headquartered in Silicon Valley, and will continue to be led by current CEO Tom Werner. The company will focus on installing its high-efficiency solar systems for residential and commercial customers, while continuing to expand its offerings in batteries and other energy services for its largely North American customers.
Meanwhile, a new company known as Maxeon Solar will be formed, to be headquartered in Singapore and led by Jeff Waters, currently CEO of SunPower’s Technologies business unit.
Tianjin Zhonghuan Semiconductor (TZS), a long-time partner of SunPower, will make an equity investment of $298 million into the new company, allowing it to continue scaling up Maxeon 5 production in Malaysia while developing its Maxeon 6 technology.
SunPower will retain ownership of the manufacturing facilities it acquired last year from SolarWorld Americas in Oregon, and continue to conduct early-stage research into PV technology. But Maxeon Solar will take control of the remainder of SunPower’s global factories, spanning Malaysia, Mexico, the Philippines and France, largely taking SunPower out of the manufacturing business.
SunPower will remain a publicly listed company, and Maxeon will eventually join it in trading on the U.S.-based Nasdaq exchange. French oil and gas giant Total — SunPower’s largest shareholder since 2011 — said it intends to remain a shareholder of both companies.
The announcement represents one of the biggest strategic shifts for SunPower since the U.S. solar group launched onto the public markets in 2005, and reflects the increasing maturation and specialization of the global solar market.
The solar industry is “entering a period of extended growth where success will be driven by value chain specialization, technology innovation and economies of scale,” SunPower CEO Tom Werner said in a statement.
“This new structure and investment will create two focused businesses, each with unique expertise to excel in their part of the value chain,” Werner said.
SunPower plans to spin off all of its shares in Maxeon Solar to its existing shareholders, after which TZS will make its $298 million investment into the new company. That funding will give Shenzhen-listed TZS a roughly 29 percent stake in Maxeon Solar at an implied $1.03 billion equity value, with SunPower’s shareholders in control of the remainder.
The deal is expected to close in the second quarter of 2020.
SunPower shares rose 8 percent in early trading on Monday on the news, to around $9. The shares have fallen sharply since touching $15 in September, but are up from around $6.30 at the beginning of 2019.
“As the main shareholder of SunPower, we support this transaction which will bring clarity and focus for both entities on their respective activities,” Total CEO Patrick Poyanné said in a statement.
(Story to be updated.
Source: Greentech Media
