BP Amoco announced last week it would pay Enron Corp. $45 million for the 50% the combine does not already own in Solarex, a company formed in 1973 that became an Amoco Corp./Enron joint venture in 1995.
In 1998, Solarex had a turnover of $58 million, while BP Solar, established in 1981 and with worldwide annual capacity to manufacture solar panels with combined capacity of 13.2 MW, had a turnover of $95 million.
The integrated solar company will be named BP Solarex and headquartered in Frederick, Md., to combine the current operations of Solarex and BP Solar. The company will be headed by Harry Shrimp, recently appointed president and CEO of Solarex, while its chairman will be Steve Gates, executive vice-president and chief of staff of BP Amoco.
BP Solarex is expected to have annual revenues of more than $150 million, equivalent to 20% of the global market for solar panels. The combine will be able to make enough solar panels each year to generate 30 MW of electric power, with manufacturing plants in the U.S., Spain, Australia, and India.
John Browne, BP Amoco chief executive, said: "BP Amoco already has a strong track record in solar, with leadership technology in key areas. This acquisition is another significant step towards our target of building a $1 billion/year solar business over the next decade.
"Our investment is part of BP Amoco's wider aim of making solar an increasingly larger contributor to the energy mix of the 21st century, in line with our determination to offer our customers progressively cleaner fuels with a diminishing impact on the natural environment."
The motives for this smaller deal are the same of those of the BP Amoco merger and now the ARCO takeover: the opportunity to bring economies of scale.
A Solarex official told OGJ that there will be some job losses arising from the creation of BP Solarex. No estimate of job losses is yet available, but the move will enable elimination of duplication in operational staff and cutting of overall administration staff.
The official said, "We are looking at the two companies and will be identifying the potential impact during the next 2 months." BP Solar's current headquarters at Sunbury-on-Thames, U.K., is expected to be a target for trimming.
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