DaimlerChrysler, Ford And Ballard In Deal To Boost Fuel Cell Capability

Autoparts Report,  Oct 8, 2001  

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DaimlerChrysler AG, Ballard Power Systems Inc. and Ford Motor Co. said they have created a new alliance to enhance fuel cell development .

The transportation alliance formed by Ballard, XCELLSIS and Ecostar will be consolidated to create an integrated fuel cell systems business. Ballard will acquire XCELLSIS, the fuel cell engine subsidiary of DaimlerChrysler, and Ecostar, the electric drive train and power conversion system subsidiary of Ford, in return for a total of Ballard common shares valued at $348 million (Cn$ 553 million). DaimlerChrysler and Ford each will also purchase a total of $34 million (Cn$ 55 million) in Ballard common shares for cash.

The transaction will take place in two steps -- one at closing and the remainder prior to December 2004. At closing, the transaction will increase DaimlerChrysler and Ford equity ownership of Ballard to 23.6 percent and 19.5 percent respectively from the current 19.3 percent and 14.5 percent.

The acquisition enhances Ballard's business beyond its world leadership in proton-exchange membrane (PEM) fuel cell components to include complete fuel cell systems for portable, stationary, and transportation markets. The acquisition also allows Ballard to become a world leader in power conversion systems for fuel cell, microturbine, internal combustion engine and renewable based power sources as well as a leader in electric drive systems.

Ballard currently owns 26.7 percent of XCELLSIS and 20.9 percent of Ecostar, both of which are part of the Fuel Cell Alliance between Ballard, DaimlerChrysler, and Ford. DaimlerChrysler and Ford currently own 51.5 percent and 21.8 percent of XCELLSIS, respectively, and 17.0 percent 62.1 percent, respectively of Ecostar.

XCELLSIS develops and commercializes PEM fuel cell systems for cars, buses and trucks and Ecostar develops and commercialize electric drive trains and power conversion systems for a variety of applications. With the transaction, Ballard enhances its capability not only to provide fuel cells, but also fuel cell systems and complete fuel cell drives.

The transaction increases the commitment of DaimlerChrysler and Ford to the development of fuel cell powered vehicles and to Ballard as their supplier of fuel cell systems for motor vehicles, spokespersons for the three companies said.

The transaction also enhances Ballard's capability to supply automakers other than DaimlerChrysler and Ford with a full range of fuel cell powertrain components (other current customers include Honda, Nissan, Mazda and Volkswagen) and to supply products for market segments other than transportation.

Firoz Rasul, Ballard's Chairman and Chief Executive Officer, said Ballard, DaimlerChrysler and Ford have been partners through shared ownership in XCELLSIS and Ecostar since 1998. "The benefits of integrating the three companies into one include organizational streamlining and rationalization that will bring cost efficiencies, faster decision-making and accelerated product development cycles," said Rasul. "We will now proceed aggressively as one company with one vision, one management team and one goal to capture the increased value in the marketplace that comes from being a full systems provider," said Rasul.

Ballard expects to launch its first transportation products for transit buses and power conversion systems products for microturbine and internal combustion engine based power generators in 2002, and its first -- commercial stationary power generation products in 2003, followed by the commercial launch of its first automotive products in the period 2003 to 2005.

COPYRIGHT 2001 Ron DeMarines
COPYRIGHT 2008 Gale, Cengage Learning