(Reuters) – South Korea’s SK conglomerate will take a $ 9.9 billion stake in hydrogen fuel cell manufacturer Plug Power Inc and form a joint venture to help supply of hydrogen battery products in Asian markets, the companies said.
As part of the transaction, a US unit of the SK Group will acquire approximately 51.4 million shares of Plug Power in Latham, New York, at a price of USD 29,2893 per share.
Plug Power shares rose 20% in extended transactions on Wednesday, after closing 7% firmer.
The agreement comes at a time of rapid demand for clean energy, signaling a gradual shift from polluting fossil fuels in the coming years.
The South Korean government in 2019 announced the Hydrogen Roadmap to 2040, with ambitious targets, including over 5MM tonnes of hydrogen per year, and expects the cumulative economic value of its hydrogen economy to reach ~ $ 40 billion by in 2040.
If a transaction is concluded, the SK Group-Plug Power investment is expected to close in the first quarter of 2021.
Morgan Stanley & Co. LLC was a financial advisor, and Goodwin Procter LLP acted as legal counsel for Plug Power.
Reporting by Arundhati Sarkar in Bengaluru; Editing by Amy Caren Daniel and Sherry Jacob-Phillips