Suntech Power (NYSE: STP) has announced that it will make a strategic investment in Nitol Solar. STP will acquire newly issued ordinary shares in Nitol Solar, an independent polysilicon producer, comprising a minority interest in Nitol Solar for a total consideration of up to $100 million.
This is of course subject to the satisfaction of certain conditions. The companies have some history as STP entered into a multi-year first phase supply agreement with Nitol Solar in August 2007 for the supply of committed monthly volumes of polysilicon to STP from 2009 to 2015.
If you look at the reports from companies like LDK Solar Co., Ltd. (NYSE: LDK) from just this morning with being fully booked in wafer orders, and with major players taking options to buy supply from producers like Hoku Scientific Inc. (NASDAQ: HOKU) that doesn't even have its main factory on line yet, you can tell that the solar companies are doing everything they can to secure more capacity.
Other deals will be coming down the pipe, and its just surprising that some of these players haven't tried using their stocks as currency to acquire each other.
Solar companies scramble to invest in capacity, and in each other
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