Hydrogen fuel cell manufacturer Ballard Power Systems announced Wednesday the sale of its automotive fuel cell assets to Daimler AG and Ford Motor Company, pending regulatory approval. The deal, involving 34.3 million Ballard shares (valued at roughly $168 million) held by Daimler and Ford that will be cancelled once the transaction is complete, has received Ballard shareholder approval.
Ballard officials said selling these assets will enable the company to focus on fuel cell-based energy solutions for commercial markets (e.g. materials handling, residential cogeneration, backup power).
“It also lowers Ballard's risk profile by addressing the realities of the high cost and long timeline for automotive fuel cell commercialization,” Ballard president and CEO John Sheridan said of the deal, in a statement. “At the same time, a new private company will be established and will be positioned for success in automotive fuel cell technology over the longer term, with management and funding provided by Daimler and Ford.”
Sheridan added that commercial markets for fuel cell technologies present large opportunities to the company.
“Our product shipments in the third quarter of 2007 were up 123 percent over the same quarter in 2006 - clear evidence of the growth potential,” Sheridan said in a statement. “We are also confident there are opportunities for our products in additional geographic markets as well as product extension opportunities in different applications.”
The assets being transferred to Daimler and Ford include the following:
- Ballard’s automotive intellectual property
- 113 employees, most of them in the research and technology development areas, that make up about 20 percent of Ballard’s total workforce
- Test equipment and inventory valued at $6 million
Once the deal is complete, Daimler and Ford will manage development of automotive fuel cell technology through a new, private company located at Ballard’s facilities. The two car manufacturers are contributing $60 million to the new company, and Ballard will contribute another $60 million (but won’t be obligated to provide any ongoing funding to the private company). Ownership in the new company will be 50.1 percent Daimler, 30 percent Ford and 19.9 percent Ballard.
The terms of the deal give Ballard rights to use both its current and future (via the private company) automotive intellectual property for non-automotive applications. Ballard also will be able to manufacture fuel cells for the private company on a profitable basis.
Ballard listed the following benefits to its operations by going through with the deal discussed here:
- Reduction in cash consumption of $15 million, resulting in shortened timeline to profitability
- Thirty percent reduction in outstanding shares
- Reduced financial requirements
- Ability to generate revenue by contracting technology services to the private company, offsetting the loss of revenue from its automotive engineering development
- The right to use transferred and future automotive fuel cell property for non-automotive applications
- Retention of its automotive manufacturing facilities and capabilities, along with the right to pursue fuel cell bus
opportunities
Ballard will continue its commitment to fulfilling current bus demonstration program contracts, which include supplying fuel cell modules for 20 BC Transit buses.
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Mae Kowalke is an associate editor for TMCnet, covering VoIP, CRM, call center and wireless technologies. She also blogs for TMCnet here. Internet Protocol (IP) | X |
| IP stands for Internet Protocol, a data-networking protocol developed throughout the 1980s. It is the established standard protocol for transmitting and receiving data
in packets over the Internet. I...more |
Voice over IP (VoIP) | X |
| A real-time communications system that converts voice into digital packets containing media and signaling data that travel over networks using Internet Protocol....more |
Backplane (bus) | X |
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