 China's Weichai Power takes a stake in Ballard Power Systems |
Ballard Power Systems has entered into a strategic collaboration with China's Weichai Power Co, which includes a substantial equity investment by Weichai in Ballard of approximately USD163 million, representing a 19.9% interest in the company and the establishment of a joint venture to support China's burgeoning fuel cell electric vehicle market. The agreement also includes a USD90 million technology transfer program to the JV, related to Ballard's next-generation LCS fuel cell stack and power modules for bus, commercial truck and forklift applications in China, and a commitment by Weichai to build and supply at least 2,000 fuel cell modules for commercial vehicles in China.
In addition, Zhongshan Broad-Ocean Motor Co., a current Ballard strategic investor and Chinese partner, has agreed to invest a further amount of approximately USD20 million at the same 15% premium to maintain its 9.9% ownership position in Ballard. As a result, the Weichai and Broad-Ocean equity investments in Ballard will total approximately USD183 million.
The transactions are expected to close in Q4 2018, subject to completion of definitive agreements, regulatory approvals and other customary closing conditions.
Established in 2002 and with listings on the Hong Kong and Shenzhen stock exchanges, Weichai Power Co., Ltd. is a leading automotive and equipment manufacturer specialising in the production of powertrains, automobiles, intelligent logistics, automotive parts and components. In 2017, Weichai, with an employee base of 74,474 people, manufactured more than 617,000 engines, 149,000 heavy-duty trucks and 200,000 forklifts.
Randy MacEwen, Ballard president and CEO, describes the deal as "an exciting and historic milestone on our roadmap to commercialise fuel cell vehicles, as we embark on a long-term collaboration with Weichai".
"Weichai brings considerable expertise in the traditional motive power business, including engine design, application engineering and powertrain integration, along with extensive customer relationships, deep knowledge of the China market, substantial operations scale, supply chain muscle and a solid balance sheet. Weichai, together with its parent company, is also well positioned with its portfolio of acquisitions and investments in leading bus, truck and materials handling OEMs. In addition, Broad-Ocean's anticipated participation in this strategic collaboration, including its incremental investment in Ballard, is further validation of the exciting China market opportunities," he adds.
Tan Xuguang, chairman and CEO of Weichai, says: "The transition in China to zero-emission vehicles is under way, and we expect fuel cells to play an important role in a variety of motive applications. Weichai, through our joint venture with Ballard, intends to be the leader in development of the fuel cell electric vehicle supply chain, by offering the most advanced fuel cell stacks and modules."