Ballard Acquires Interest in XCELLSIS and Ecostar

October 02, 2001 by Jeff Shepard

Ballard Power Systems Inc. (Vancouver, BC), DaimlerChrysler AG (Stuttgart, Germany) and Ford Motor Co. (Dearborn, MI) announced the signing of an agreement in which Ballard will acquire the interests of DaimlerChrysler and Ford in XCELLSIS GmbH (Vancouver, BC) and Ecostar Electric Drive Systems LLC (Dearborn, MI).

Firoz Rasul, Ballard's chairman and CEO, said, “Consolidating XCELLSIS and Ecostar into Ballard will make Ballard a stronger company with expanded markets, more products, greater capabilities, an unrivaled technology portfolio and a formidable team, extending Ballard's lead in the fuel cell industry. This transaction will result in the increased commitment of DaimlerChrysler and Ford to Ballard's success. Ballard's expanded product range and enhanced ability to provide complete solutions will bring us much closer to all our customers.”

Jurgen Hubbert, member of the board of management of DaimlerChrysler, said, “To date, DaimlerChrysler has invested approximately $1.0 billion in fuel cell research and development and presented 10 fuel cell vehicles as either concept cars or test vehicles, each one powered by Ballard fuel cells. The new vehicular fuel cell alliance structure will further enhance the rapid technology development demonstrated to date. DaimlerChrysler will enthusiastically continue to pursue development of this revolutionary fuel cell technology with the goal of being first to market.”

Wayne Booker, vice chairman of Ford, commented, “Ballard acquiring XCELLSIS and Ecostar will enhance the development of portable, stationary and transportation fuel cell products. At Ford, we are committed to delivering environmentally sound products to our customers. We see fuel cells as an important part of our long-term environmental strategy.'

As a result of the agreement, Ballard will issue an aggregate of 18,403,523 common shares to acquire the interests of DaimlerChrysler (9,405,271 shares) and Ford (8,998,252 shares) in XCELLSIS and Ecostar. Based upon the closing price on October 1, 2001, the Ballard shares to be issued are valued at $553.0 million (US$348.0 million). As a result of the issuance of Ballard common shares, DaimlerChrysler and Ford will increase their ownership in Ballard to 23.6 percent and 19.5 percent, respectively, from 18.0 percent and 13.5 percent, currently. Ballard, DaimlerChrysler and Ford will enter into a new 20-year vehicular fuel cell alliance agreement, replacing the existing alliance agreement. DaimlerChrysler and Ford will invest an additional $110.0 million (US$69.0 million) cash, $55.0 million through a private placement of Ballard common shares on the closing of the acquisitions, and the remainder through participation in equity financings of Ballard within the next three years.