Plug Power leaps 33% after South Korean conglomerate SK Group announces $1.5 billion investment
Jung Yeon-Je/AFP/Getty Images
- Plug Power surged as much as 33.4% on Thursday after announcing SK Group will invest $1.5 billion into the hydrogen fuel cell producer.
- The companies aim to boost hydrogen energy use in Asia through the creation of fueling stations, fuel cell systems, and electrolyzers, according to a press release.
- SK, South Korea’s third-largest conglomerate, will purchase roughly 51.4 million shares through the arrangement. The investment is expected to represent a 9.9% stake in Plug.
- The deal remains subject to regulatory approval and is expected to close in the first quarter of 2021.
- Watch Plug Power trade live here.
Plug Power rocketed as much as 33.4% higher on Thursday after the company revealed SK Group is investing $1.5 billion in the firm as part of a new joint venture.
The companies aim to increase the use of hydrogen energy in Asia through the deal, according to a Wednesday press release. Plug, a US-based producer of hydrogen fuel cells, will collaborate on building out fueling stations, fuel cell systems, and electrolyzer in South Korea and throughout Asia.
SK, South Korea’s third-largest conglomerate, purchased roughly 51.4 million shares of Plug’s common stock at $29.29 per share as part of the deal. The investment is expected to represent a 9.9% pro forma stake in Plug Power.
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The collaboration offers “immediate strategic benefits” and is intended to create a formal joint venture by 2022, Plug CEO Andy Marsh said in a statement.
The deal remains subject to regulatory approval and is expected to close in the first quarter of 2021, according to the press release.
The South Korean government announced in early 2019 plans to increase its use of hydrogen and build out fuel-cell infrastructure through 2040. The country expects the strategy to create roughly $40 billion in economic value.
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Morgan Stanley is serving as Plug’s financial advisor, while Goodwin Proctor will serve as the firm’s legal advisor.
Plug Power closed at $35 on Wednesday. The company has nine “buy” ratings and seven “hold” ratings from analysts.
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