ReneSola snaps up Dynamic Green Energy in $88.5m deal

The consolidation of the booming Chinese solar energy market continued this week after wafer manufacturer ReneSola announced it is to acquire Dynamic Green Energy, a producer of photovoltaic products, in a cash and paper deal valued at around US$88.5m (£53.4m).

ReneSola said yesterday that it will issue 26.8m shares and a US$10m (£6.14m) convertible promissory note in exchange for all the stock of Dynamic Green, which manufactures PV modules, ingots, wafers and cells through its wholly-owned subsidiary Jiawei Solarchina.

Dynamic Green also provides original equipment manufacturing (OEM) services to a number of high- profile solar cell and module makers such as China's JA Solar, Suntech Power and Solarfun Power.

ReneSola chief executive Li Xianshou said that the acquisition would " significantly increase our OEM capabilities and will accelerate the implementation of our strategy to become a fully integrated solar company".

ReneSola, which recently posted second-quarter losses of US$3.6m (£2.2m), is looking to play a leading role in the anticipated consolidation of China's solar energy industry.

There are about 150 makers of polycrystalline silicon wafers in China alone, a contributing factor to the recent product oversupply that has resulted in a drop in solar panel prices amid weakened global demand. Experts have long predicted that the market will consolidate around a few high-profile players as demand for solar technologies recovers.

The ReneSola deal follows the US$77.6m (£47.6m) acquisition in January of Chinese solar-grade polysilicon maker Cyber Power by PV cell manufacturer Yingli Green Energy, and industry insiders are convinced that similar consolidation deals are in the pipeline.