South Korea-based conglomerate SK Group will take a 9.9% stake worth $1.5 billion in hydrogen fuel cell maker Plug Power Inc and form a joint venture to help provide hydrogen fuel cell products to Asian markets, the companies said.
As part of deal, a U.S. unit of SK Group will acquire about 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 extended trading on Wednesday after closing 7% firmer.
The agreement comes at a time of brisk demand for clean energy, signaling a gradual shift from polluting fossil fuels in the coming years.
The South Korea government in 2019 announced the Hydrogen Economy Roadmap through 2040, with ambitious goals, including over 5MM tons of hydrogen per year, and expects the cumulative economic value of its hydrogen economy to reach ~$40 billion by 2040.
If a deal comes through, the SK Group-Plug Power investment is expected to close in the first quarter of 2021.
Morgan Stanley & Co. LLC served as the financial adviser and Goodwin Procter LLP acted as legal adviser to Plug Power.