Seoul, Korea and Hamburg, Germany, September 11, 2008 – LG Electronics (LG), a global leader and technology innovator in consumer electronics, and Conergy AG, the leading Photovoltaic(PV) solution provider, announced that they have signed a memorandum of understanding to form a joint venture in the solar module manufacturing business.
LG would acquire a 75 percent stake in Conergy’s solar module plant in Frankfurt (Oder), under the deal, and Conergy would retain 25 percent. The plant is currently in the ramp-up phase. LG and Conergy project that their partnership would get underway by the end of this year.
LG will bring to this deal its extensive R&D knowledge, including several years of R&D in various photovoltaic technologies. LG will also leverage its leading expertise in mass manufacturing from similar industries such as flat panel displays. Conergy, as the leading PV solution provider, will provide the joint venture with unparalleled access to the market through its distribution franchise that spans across over 20 countries on five continents.
The solar industry presents an exciting new growth platform for LG. With its superior technology and competitive manufacturing, LG plans to become a global leader in the solar industry. The joint venture with Conergy provides LG a unique opportunity to make a swift and effective entry into the solar industry, with a leading downstream company as its partner.
“This is an opportunity for us to take the lead in the solar technology market right from the start. Contributing our technology and operational expertise to the joint venture allows us to enter the industry much faster and with better valuations than would simply acquiring a standalone solar module manufacturer,” said Kwan Shik Cho, head of the Solar Cell Business Team at LG Electronics. “In addition, this partnership provides us with the strategic advantage in that we gain Conergy ¬¬– the leading global downstream player – as a long term partner.”
For Conergy, the joint venture is a step further on its road to becoming a focused downstream company. The Strategic partnership would also secure Conergy’s technological lead and future supply of solar modules and help pave the way to profitable growth.
“In taking this step, we have created the opportunity for a long-term partnership with LG Electronics. This strategic alliance will also help us further develop into a leading provider within the photovoltaic market," said Dieter Ammer, CEO of Conergy. "This would also mean moving significantly further in our realignment program, with a clear focus on downstream activities.”
In November 2006, Conergy started construction of its plant in Frankfurt (Oder), which ranks among the most modern of its kind and employs more than 400 staff. Conergy will supply the plant with silicon deliveries and will take over the principal role of future marketing of the modules.
The MOU is non-binding. Signing of the transaction is subject to satisfaction of certain conditions. And closing is anticipated by year end. Morgan Stanley is advising LG Electronics and Jefferies is advising Conergy in the transaction.
# # #
About LG Electronics, Inc.
LG Electronics, Inc. (KSE: 066570.KS) is a global leader and technology innovator in consumer electronics, home appliances and mobile communications, employing more than 82,000 people working in 114 operations including 82 subsidiaries around the world. With 2007 global sales of USD 44 billion, LG is comprised of four business units - Mobile Communications, Digital Appliance, Digital Display and Digital Media. LG is the world’s leading producer of mobile handsets, flat panel TVs, air conditioners, front-loading washing machines, optical storage products, DVD players and home theater systems. For more information, please visit www.lg.com.
Conergy AG is one of the leading solar enterprises in Europe and with over 70,000 solar systems installed also a global market leader in the field of solar system integration. Listed since 2005 on the Frankfurt Stock Exchange, the group pursues a global growth strategy: it produces, installs and plans solar systems for its customers in more than 20 countries. The Conergy Group is represented by branch offices on four continents.