Hyundai Electric, Hyundai Heavy Industries (HHI) Group's affiliate specializing in power equipment and energy solutions, will acquire domestic power conversion system maker PLASPO to strengthen its technological competitiveness of its eco-friendly, new and renewable energy business.

Hyundai Electric announced in a regulatory disclosure dated February 4 that it would buy a 61.8% stake in PLASPO for KRW 22.87 billion.

A definitive agreement for the acquisition is to be signed within the same month.

After acquiring 53.8% of the shares held by the existing shareholders, Hyundai Electric will also underwrite a third-party allocation of new shares to increase PLASPO's capital to secure managerial control.

Established in 2001, PLASPO engages in photovoltaics (PV) and energy management solutions, including power conversion systems for new and renewable energy. It possesses outstanding technological prowess with its long-standing know-how in eco-friendly power generation using various new and renewable energy sources ranging from PV and wind power to fuel cells.

Particularly noteworthy is that the acquisition is expected to pave the way for Hyundai Electric to further strengthen its competitiveness in the energy storage system (ESS) market, one of the innovative technologies that the South Korean plans to adopt at a national level as part of its Green New Deal.

An ESS is a device or group of devices assembled together, capable of storing energy in order to supply electrical energy at a later time, thereby improving the efficiency of power use.

Hyundai Electric will use its independent technology to develop ESSs interlinked with PLASPO's power conversion systems, making inroads into the overseas markets for distributed energy resource (DER) systems in North America, Europe, and elsewhere while also supplying to Korea’s private and public sector ESS initiatives where large-scale orders are expected.

In addition, synergy is also expected in the energy solutions business, the new growth engine for Hyundai Electric.

By combining PLASPO’s power generation know-how with its own intelligent energy solution INTEGRICT, Hyundai Electric aims to gain an early edge in the new and renewable energy solution business, which is emerging as the next-generation power market.

“We will further enhance our position in the eco-friendly energy solutions and ESS markets through close technological cooperation between the two companies,” said an official of Hyundai Electric. “By maximizing the synergy effect between the two companies, we are poised to become a green energy leader in various areas in the carbon-neutral era.”