(Reuters) – South Korea-based conglomerate SK Group will take a 9.9% stake of $ 1.5 billion 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 US unit of SK Group will acquire approximately 51.4 million shares of Latham, New York-based Plug Power, at a price of $ 29.2893 per share.
Plug Power shares were up 20% in expanded trading Wednesday, after closing 7% more firmly.
The agreement comes at a time of strong demand for clean energy, indicating a gradual shift from polluting fossil fuels in the coming years.
South Korea’s government announced in 2019 its hydrogen economy roadmap to 2040, with ambitious goals including more than 5 million tons of hydrogen per year, and expects the cumulative economic value of its hydrogen economy to reach ~ $ 40 billion by 2040.
If a deal is struck, the SK Group-Plug Power investment is expected to be completed in the first quarter of 2021.
Morgan Stanley & Co. LLC acted as financial advisor and Goodwin Procter LLP acted as legal advisor to Plug Power.
Reporting by Arundhati Sarkar in Bengaluru; Adaptation by Amy Caren Daniel and Sherry Jacob-Phillips