As per reports, Plug Power Inc. (PLUG) and one of the leading South Korean business groups, S.K Group to enter a strategic partnership to accelerate hydrogen as an alternative energy source in Asian markets. Plug Power and SK Group both intend to provide hydrogen fueling stations, hydrogen fuel cell systems, and electrolyzers to the Korean and broader Asian markets. This investment represents the largest U.S. clean energy PIPE in the last 20 years
Both the companies have also agreed to enter into a definitive agreement where SK Group will invest $1.5 billion in Plug Power and are also planning to form a joint venture in South Korea to support and grow the rapidly growing Asian Market.
The South Korean government announced ambitious goals with its Hydrogen Economy Roadmap through 2040 in January 2019, including over 6MM fuel cell EVs, over 5MM tons of hydrogen per year, 15 GW of fuel cell power generation, and 1,200 refilling stations. It predicts the cumulative economic value of its hydrogen-based economy to reach ~$40Bn by 2040.
“SK Group has an established strategy for building out the hydrogen economy in South Korea and beyond. The current relationship with SK Group offers immediate strategic benefits to Plug Power to accelerate its expansion into Asian markets – and is intended to result in a formal joint venture (JV) by 2022. Due to the complementary strengths in this partnership, we expect rapid growth and significant revenue generation from the joint venture that is incremental to our 2024 plan.” stated Andy Marsh, CEO for Plug Power.
Plug Power has been successful and has proved its ability to build a hydrogen business in North America (a global leader in the hydrogen economy). The deal to partner with SK is an attractive opportunity to set its foot in this market with one of South Korea’s leading industrial conglomerates,
SK Group to invest $1.5 billion in Plug Power through its US-based subsidiary and by acquiring approximately 51.4 million common shares for $29.2893 per share, as per the terms of the agreement. Morgan Stanley & Co. LLC is serving as Financial Advisor to Plug Power and Goodwin Procter LLP is its legal advisor. The transaction is expected to close in the first half of 2021 and is subject to regulatory and customary closing conditions.
About Plug Power
Plug Power, an American company headquartered in Latham, New York is the architect of modern hydrogen and fuel cell technology. The company’s innovative technology powers electric motors with hydrogen fuel cells amid an ongoing shift in the power, energy, and transportation industries to meet the ongoing climate change requirements along with providing efficiency gains and fulfilling sustainability goals.
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