Partnership Formed to Develop Vehicular Fuel Cells

July 11, 2004 by Jeff Shepard

DaimlerChrysler AG and Ford Motor Co. announced that they would provide $58 million to partner Ballard Power Systems Inc. (Vancouver, BC) for further fuel cell development, and alter their roles in the alliance as part of a proposed agreement. Ballard has been in the forefront of developing hydrogen fuel cells for automobiles. Ballard's partners in commercializing fuel cells include DaimlerChrysler and Ford, though the alliance would be somewhat redefined under the new agreement.

Besides the funding, DaimlerChrysler and Ford would buy Ballard's vehicular fuel cell systems unit and become jointly responsible for developing and making the systems. The two automakers, which currently have a 35% stake in Ballard, would acquire the systems business and, in exchange, return nine million Ballard common shares they hold. The shares, valued at $80.4 million, would then be canceled.

After the deal, DaimlerChrysler and Ford would own 32.7% of Ballard. Ballard said the companies expect to complete the deal later this year. The realignment would allow Ballard to focus on fuel cell research while tapping resources at DaimlerChrysler and Ford.