Solar power manufacturer SunEdison and its power plant holding unit TerraForm Power have signed a definitive agreement to acquire US-based First Wind for $2.4bn.
The acquisition is expected to make SunEdison a leading global renewable energy development company.
As a result, it has raised 2015 project installation guidance from 1.6GW-1.8GW to 2.1GW-2.3GW.
Under the agreement, SunEdison will acquire more than 1.6GW of the projects in pipeline and backlog, which have been included in TerraForm Power’s call right project list. These are likely to be operational by 2016-17.
The acquisition also involves opportunities for developing 6.4GW of power projects.
SunEdison president and CEO Ahmad Chatila said: "The acquisition of First Wind transforms both SunEdison and TerraForm Power into diversified renewable energy companies and will make SunEdison the leading renewable power plant developer in the world.
"By bringing together First Wind’s proven development and operational capabilities and SunEdison’s global corporate infrastructure and renewable energy development and finance experience, we will be well-positioned to capitalise on the significant growth opportunities in the global wind power markets and drive returns to shareholders of both SunEdison and TerraForm Power."
TerraForm Power president and CEO Carlos Domenech added: "This acquisition is immediately accretive and establishes TerraForm Power as a leading asset owner in the wind energy market, while demonstrating the company’s commitment to delivering on TerraForm Power’s diversified growth strategy.
"We are adding significant CAFD through a transaction with a greater than 9% levered cash-on-cash yield, increasing our dividend by 44% and expanding the potential drivers of our long-term growth."
First Wind chief executive officer Paul Gay also commented: "This new strategic organisation will allow us to join with SunEdison to develop and invest in new, long-term-contracted, well-sited and well-run renewable energy projects that deliver clean energy to homes and businesses across the country and internationally.
"We will be able to leverage our strength in development and operations, proven during the completion of 1.5 GW of wind projects over eight years, with two world-class companies."
The transaction is awaiting regulatory approvals and is expected to be concluded by the first quarter of 2015.
Image: SunEdison and TerraForm Power will buy First Wind for $2.4bn. Photo: courtesy of First Wind