RIL’s renewable energy arm buys REC Solar Holdings in $771 mn deal

Reliance New Energy Solar Ltd (RNESL), a wholly-owned subsidiary of Reliance Industries Ltd (RIL), has announced acquisition of 100 per cent shareholding of REC Solar Holdings AS (REC Group) from China National Bluestar (Group) Co Ltd., for an Enterprise Value of $771 million.

A press release issued by the Reliance group said, the Norway-headquartered REC has its operational headquarters in Singapore and regional hubs in North America, Europe, Australia, and Asia-Pacific. REC Group is an international pioneering solar energy company leading the industry through its technological innovations and superior, high efficiency and long-life solar cells and panels for clean and affordable solar power. The 25-year-old company has three manufacturing facilities – two in Norway for making solar grade polysilicon and one in Singapore making PV cells and modules.

REC’s Alpha and Alpha Pure range of solar modules are recognized as among industry leaders in efficiency, reliability and long guaranteed life. The heterojunction (HJT) technology used by REC helps its modules surpass the performance of other commonly used technologies in the industry.

REC has over 600 utility and design patents, of which 446 are granted and balance are under evaluation. It always had strong focus on research and development and now, coupled with Reliance’s world-class innovation, scale, and operational excellence, will further accelerate path breaking technological developments and introduction of new products.

REC is a trusted brand globally known for pioneering innovations. REC was the first to introduce half cut Passivated Emitter and Rear Cell (PERC) technology, which is adopted by all major manufacturers today, while REC has moved on to its, next generation HJT technology. REC’s Norway operation is distinguished by its low carbon footprint in the manufacture of polysilicon.

REC has more than 1,300 employees globally. They will become proud members of the Reliance Family after the successful completion of the transaction and become an integral part of the team that is driving one of the world’s most ambitious mission to drive green energy transition.

The release added that Reliance will strongly support for REC’s planned expansions including 2-3 GW Cells and Module capacity in Singapore, brand new 2 GW Cells and Module unit in France and another 1 GW Modules plant in the US.

In India, Reliance plans to use this industry leading technology in their fully integrated, metallic Silicon to PV Panel manufacturing giga factory at Dhirubhai Ambani Green Energy Giga Complex, Jamnagar initially starting with 4 GW per annum capacity and eventually growing to 10 GW per annum. Reliance’s deep expertise of scale, project execution and operational excellence coupled with REC’s technology will facilitate the establishment of state-of-the-art next-generation fully integrated PV manufacturing facility at Dhirubhai Ambani Green Energy Giga Complex and subsequently replicate such complexes around the world. The acquisition of REC will help Reliance with a ready global platform and the opportunity to expand and grow in key green energy markets globally, including in the US, Europe, Australia and elsewhere in Asia.

The press release quoted r Mukesh Ambani, Chairman of Reliance Industries Limited, as saying: “…it (the acquisition) will help Reliance tap the unlimited and year-long power of Soorya Dev, the Sun God, that India is fortunate to be blessed with. It is in line with our strategy of investing in new and advanced technologies and operating capabilities aimed at achieving Reliance’s goal of enabling 100 Gw clean and green energy before the end of this decade. This will constitute the largest contribution by a single company to Honourable Prime Minister Shri Narendra Modi’s target for India to produce 450 Gw renewable energy by 2030. It will enable India to become a world leader in green energy transition to overcome the climate crisis.”

Goldman Sachs is acting as the exclusive financial advisor and Davis Polk & Wardwell LLP are acting as the legal advisor to Reliance in this transaction.

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