BALLARD AND DAIMLER-BENZ TO INVEST OVER $450 MILLION IN FUEL CELL VENTURES TO DEVELOP THE NEXT GENERATION OF ENGINES FOR THE WORLD'S AUTOMOBILES
VANCOUVER/STUTTGART, April 14 /CNW/ - Ballard Power Systems Inc. of Canada and Daimler-Benz AG of Germany announced today that they are combining forces and jointly investing over $450 million in fuel cell ventures to develop the next generation of efficient and clean engines for the world's automobiles using Ballard Fuel Cells. The two companies signed a detailed memorandum of understanding which will result in the alliance of Ballard, the world leader in proton exchange membrane fuel cells, with Daimler-Benz, the quality and innovation leader in the automotive industry.
Ballard Fuel Cells are electrochemical devices which convert a fuel, such as methanol, natural gas or hydrogen into usable electricity, directly without combustion. Surrounding a fuel cell is a system which consists of a fuel processor, air supply subsystem, cooling subsystem and controls. Combining these subsystems with the fuel cell creates a fuel cell engine which can power a car, truck, bus or other vehicle.
In the proposed transaction, Daimler-Benz will invest a total of $198 million in Ballard by contributing all of its fuel cell stack technology, related fixed assets and $142 million in cash to Ballard in return for 5,653,664 new treasury shares of Ballard at a price of $35 per share which will constitute 25% of Ballard's outstanding shares after the investment. In addition, Daimler-Benz will invest a total of $207 million made up of all of its fuel cell system technology, related fixed assets and $57 million in cash
into a new fuel cell engine company which will develop and commercialize fuel cell systems to be supplied to the world's automotive industry as the engines for tomorrow's automobiles in return for two-thirds of this engine company. Ballard Power Systems will invest a total of $103 million made up of all of its vehicular fuel cell system technology, related fixed assets and cash of
$53 million to the new fuel cell engine company for one-third ownership of the engine company. Ballard Power Systems will supply the fuel cell engine company with the fuel cells which will be integrated into fuel cell engines for sale.
In addition, Ballard Power Systems and the new engine company will
jointly form a new company which will market all fuel cells for vehicular applications made by Ballard Power Systems and all fuel cell engines for vehicular applications made by the fuel cell engine company to all of the world's automobile, truck and bus manufacturers.
Ballard Power Systems and the new fuel cell engine company will together spend over $200 million over the next three years to develop and commercialize fuel cells and fuel cell engines for market introduction after the year 2000.
The transaction is subject to the approval of Ballard Power Systems' shareholders, which will be sought at the Company's annual general meeting on May 29, 1997, satisfactory completion of all formal agreements between the companies and the approval of regulatory authorities. Final completion of the transaction is expected to occur during the third quarter of 1997. Financial advisors to the Company on this transaction were Morgan Stanley & Co. Incorporated of New York and Goepel Shields & Partners Inc. of Vancouver.
``This relationship with Daimler-Benz is the most significant event to occur to date in Ballard's history. It will be a catalyst for the development of the next generation of clean and efficient automobiles, and will enable Ballard to become a major supplier of a key automotive component,'' said Firoz Rasul, Ballard's President and Chief Executive Officer. ``We have successfully collaborated with Daimler-Benz over the past four years and, by joining forces, we can together build on our technological and market lead to provide
the world automotive industry with cost effective fuel cells and fuel cell engines for use in their vehicles.''
Daimler-Benz presented the first traffic-ready passenger car vehicle using fuel cell engine technology in 1994. At that time, the fuel cell system took up almost the entire cargo space of the van. Only two years later, the company launched a fuel cell car that had room for six people. The next goal is to integrate fuel cells into the recently introduced subcompact Mercedes-Benz A-Class in the near future.
Daimler-Benz chairman Juergen E. Schrempp sees this partnership as
further proof of the company's continuous strive for progress through
innovation. Observes Schrempp: ``A provider of premium automobiles can
distinguish itself from the competition only through outstanding technological achievements. The fuel cell is the only so-called ``alternative engine'' with the potential to harmonize mobility and environmental concerns. Through the intensified collaboration with Ballard, Daimler-Benz will further expand its technological lead.''
Dr. Ferdinand Panik, Daimler-Benz Senior Vice President and head of the fuel cell project sees the fuel cell engine as ``the alternative engine with the greatest chance of seriously competing with the combustion engine.'' He emphasizes: ``Daimler-Benz wants to be the first to bring a production automobile with fuel-cell engine technology to the market and to develop a major business with Ballard to supply fuel cell engines to the world.''
Daimler-Benz is the world's most comprehensive provider of
technologically advanced transportation products, traffic systems and services and has 290,000 employees and revenues of approximately $70 billion. Daimler-Benz is focused on the development and manufacture of Mercedes-Benz cars and commercial vehicles, Freightliner trucks, rail systems, diesel engines and microelectronics. Daimler-Benz Aerospace builds aircraft and space systems and Daimler-Benz InterServices provides leasing and sales financing, mobile communications and information technologies. North America, where Daimler-Benz employs more than 18,000 people, is the largest regional market outside of Europe and accounts for approximately 20 percent of worldwide
revenues. In 1993, Daimler-Benz became the first German company to list its stock on the New York Stock Exchange (symbol: DAI).
Ballard Power Systems is the world leader in the development of proton exchange membrane fuel cells. At the heart of its products is the Ballard Fuel Cell, a proprietary zero-emission engine that converts natural gas, methanol, or hydrogen fuel into electricity without combustion. Ballard Fuel Cells are currently being used by leading international companies to develop zero-emission vehicles and clean stationary electric power generators.
Ballard's Common shares are listed on The Toronto Stock Exchange underthe trading symbol ``BLD'' and on the Nasdaq National Market System under the symbol ``BLDPF''. |
