(Reuters) – South Korea’s SK-based conglomerate SK will take a $ 1.9 billion stake in hydrogen fuel cell manufacturer Plug Power Inc and form a joint venture to help supply hydrogen fuel cell products to Asian markets, the companies said.
As part of the deal, a U.S. unit of SK Group will acquire about 51.4 million shares of Plug Power, headquartered in Latham, New York, at a price of $ 29,2893 per share.
Plug Power shares rose 20% in extended trading on Wednesday after closing 7% firmer.
The agreement comes at a time of strong demand for clean energy, which marks a gradual shift in polluting fossil fuels in the coming years.
The South Korean government announced in 2019 the roadmap of the hydrogen economy until 2040, with ambitious goals, including more than 5MM tons of hydrogen per year, and expects the economic value accumulated from its hydrogen economy will reach about $ 40 billion by 2040.
If an agreement is reached, SK Group-Plug Power’s investment is expected to close in the first quarter of 2021.
Morgan Stanley & Co. LLC was a financial advisor and Goodwin Procter LLP acted as Plug Power’s legal advisor.
Reports of Arundhati Sarkar in Bengaluru; Edited by Amy Caren Daniel and Sherry Jacob-Phillips