Vivint Solar, the second-largest rooftop solar developer in the U.S., is calling off a US$1.82-billion merger with SunEdison, accusing the struggling integrated solar giant of a “willful breach” of their deal.
SunEdison valued Vivint at $2.2 billion when it announced plans to acquire the rooftop developer in mid-2015. Executives boasted the purchase would triple SunEdison’s value and create “the first renewable energy super-major.”
But the company has faced mounting problems since then, reflected in layoffs of 10% of its work force in October. In December, it negotiated the price of its Vivint acquisition down to $1.82 billion. The deal’s final collapse “suggests SUNE’s [SunEdison’s trading code] liquidity/bankruptcy risks could be serious,” Oppenheimer Equity Research analysts told Greentech Media.
SunEdison stock, which reached a high of $31.56 last July, was trading between $2.00 and $3.00 after the latest announcement.
In calling off the deal, Vivint accused SunEdison of failing to meet the obligations it took on in the merger agreement, adding that it would “seek all legal remedies” to avoid financial penalties for breaking off the agreement. Analysts at Deutsche Bank suggest Vivint, buoyed by high demand for rooftop solar in the U.S., will shake off any ill effects from the abandoned merger.