TOTAL Buys 60% of SunPower to Spark - Analyst Blog

Oil giant TOTAL S.A. (TOT) has acquired a 60% stake in solar power company SunPower Corp. (SPWRA) to create a new global leader in the solar industry.

As part of the deal, TOTAL completed an all-cash tender, buying all the Class A and Class B shares of SunPower for a total value of $1.3 million. The tender comprised of TOTAL buying a total of 60% stake in SunPower.

In the transaction, TOTAL acquired 30,220,701 shares of Class A common stock and 25,220,000 shares of Class B common stock at a purchase price of $23.25 per share. The company said adjustments are needed after the expiration of the guaranteed delivery period as of June 17, 2011.

Following the completion of the transaction, SunPower will operate as a subsidiary of French oil producer TOTAL. However, SunPower will continue to trade on NASDAQ under the symbols “SPWRA” and “SPWRB."

This transaction creates a new success story for TOTAL in the solar power industry. TOTAL said the combination of both the companies has created a remarkable asset. It also said SunPower will be the pivot of the solar activities of TOTAL.

As for SunPower, TOTAL's transformational investment in the company will significantly strengthen its position, accelerate success in a broader marketplace and enhance R&D efforts, which are known for producing world record-breaking efficiency technology. Through this union of complementary strengths, SunPower and TOTAL expect to change the way the world is powered.

TOTAL of France is one of the largest publicly traded, globally integrated oil and gas companies based on production volumes, proved reserves and market capitalization. The company has exploration and production operations across five continents.

Headquartered in San Jose, California, SunPower is a vertically integrated solar company with presence across the entire solar value chain. The company designs, develops, manufactures, markets and sells high-performance solar electric power technology products, systems and services worldwide for residential, commercial and utility-scale power plant customers. The company's semiconductor-based solar cells and solar panels, which convert sunlight into electricity, are manufactured using proprietary processes and technologies.

SunPower currently retains a short-term Zacks #4 Rank, which translates into a Sell rating. However, we maintain our long-term Outperform rating on the stock. TOTAL currently retains a Zacks #3 Rank (short-term Strong Hold rating), which translates into a long-term Neutral rating.