On Wednesday, Westinghouse Solar (NASDAQ: WEST) and Australian renewable company CBD Energy (ASX: CBD) signed a definitive merger agreement.
The companies plan to complete the merger by the third quarter of 2012.
Westinghouse shareholders will obtain 15% of the company, and they will receive 3.7 shares of CBD per Westinghouse share.
The Boards of Directors of both companies approved the deal and believe the new company will benefit greatly from the combined forces of both parties.
Westinghouse, which makes solar panels and solar power systems, had been struggling under the pressure of the drop in solar prices. CBD has the financial stability that Westinghouse needs to maintain its place in the solar industry.
CBD, meanwhile, has been looking for a way into the North American renewable market, and with Westinghouse it will be able to expand the company beyond just solar to markets like energy storage.
CBD’s chief executive officer Gerry McGowan expressed optimism about the merger:
“The U.S. market is rapidly developing into one of the largest and most stable end-markets for solar energy systems. The merger provides CBD an immediate point of access with an experienced management team capable of driving rapid expansion for the combined business.”
When the merger was announced, Westinghouse CEO Barry Cinnamon was removed and replaced with interim CEO Margaret Randazzo.
Randazzo had been chief financial officer at Westinghouse and will continue to act in both roles during the interim.
Randazzo believes the merger will expand the possibilities for Westinghouse:
“Our team is excited about the enhanced opportunities this transaction provides both companies and the benefits for our shareholders.”
Westinghouse was down 15% on Wednesday to $0.33. The company dropped 79% in value over the past year.
That’s all for now,