Reliance Acquires REC Group in $771 Million Buy Out

2021 AGM of RIL, Mukesh Ambani

In a stock exchange filing today, Reliance Industries Limited (RIL) today acquired Norway-headquartered solar module maker REC Solar Holdings (REC Group) for an enterprise value of US$ 771 million (around Rs 5,800 crore) from China National Bluestar. The acquisition was done through its fully owned subsidiary, Reliance New Energy Solar Limited.

“Reliance New Energy Solar Ltd (RNESL), a wholly owned subsidiary of RIL, has acquired REC Solar Holdings AS (REC Group) from China National Bluestar (Group) Co Ltd., for an enterprise value of $771 million,” says the RIL statement.

The statement adds that REC has more than 1,300 employees globally and they will all be retained after the successful completion of the transaction.

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REC Group has an annual solar panel production capacity of 1.8 gigawatts (GW). It has installed around 10GW capacity globally till now, with a strong presence in the US, Europe and other key markets, besides India. In India, it is led by Rohit Kumar, Director, Indian Subcontinent.

Its operational headquarters is in Singapore and regional hubs in North America, Europe, Australia and Asia Pacific. The company is heavily R&D driven, with a portfolio of 600 utility and design patents of which 446 have been granted and the balance is under evaluation, has always focused on research and development. It claims to have over 5000 MW of panels installed in the Indian subcontinent.

Its last big launch was its  Alpha Series, with a temperature coefficient of 0.26% per degree Celsius, to withstand the higher temperatures of the subcontinent. Temperature coefficients measure the drop in efficiency of solar panels with every degree rise in temperature and the industry average is around 0.3% to 0.5%

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The firm has focused on the commercial and industrial segment in India, owing to its premium positioning, and the longer warranties that it offers for its panels.

Speaking about the deal, Mukesh Ambani, Chairman of Reliance Industries Limited, said: “I am immensely pleased with our acquisition of REC because it will help Reliance tap the unlimited and year-long power of Soorya Dev, the Sun God, that India is fortunate to be blessed with. It is in line with our strategy of investing in new and advanced technologies and operating capabilities aimed at achieving Reliance’s goal of enabling 100 GW clean and green energy before the end of this decade.”

The REC acquisition has been in the works for a few months now, with price tags of upto $1 billion being thrown around. For reliance, it also follows a series of acquisitions it has been making in other firms with a foothold in the future of renewable energy, namely storage and more.