SMA Solar shares rise after Zeversolar takeover: CEO
FRANKFURT (Reuters) - Shares in SMA Solar (S92G.DE), Germany's top solar company, rose on Friday after an acquisition gave it access to China, seen as overtaking Germany next year as the world's No.1 solar market.
SMA Solar late on Thursday announced the acquisition of a 72.5 percent stake in Jiangsu Zeversolar, a move that drove its shares up as much as 7.6 percent on Friday. At 7:39 a.m. ET, they were still up 3 percent.
"SMA Solar so far had no access to the Chinese market. Thus, the acquisition makes clear strategic sense," said a trader.
Plunging subsidies for solar power in Europe have driven the local solar industry to the brink of collapse, forcing many players to file for insolvency or look for growth in foreign markets to remain profitable.
China, however, has been a tough nut to crack, usually favoring local suppliers. In addition, Western solar firms have alleged price dumping by Chinese peers, triggering a trade war that reached the WTO last month.
China is spending 13 billion yuan ($2.1 billion) on its solar industry this year and, said SMA Solar Chief Executive Pierre-Pascal Urbon, is expected to install 2-3 gigawatts (GW) of solar power this year, a figure which could soar to 8 GW next year.
"We hope for very strong growth in sales next year," Urbon told Reuters on Friday.
He added Zeversolar's sales for 2012 would remain largely stable compared with the 30 million euros ($40 million) generated in 2011. SMA aims for sales of 1.3-1.5 billion euros this year.
Urbon said SMA had an option to secure the remaining stake in Zeversolar, which is expected to generate positive earnings per share (EPS) from 2014, but added the group currently had no plans to do so.
(Reporting by Christoph Steitz; Editing by Mike Nesbit)