(Updates with closing share prices in second paragraph.)
Jan. 3 (Bloomberg) -- Solar stocks gained after LDK Solar Co., China’s second-largest panel maker, agreed to buy Sunways AG of Germany, the first acquisition by a Chinese solar company in the world’s largest photovoltaic market.
Bloomberg Global Leaders Solar Index of 37 companies rose 3.7 percent, the most in two weeks, led by a 7.9 percent gain in Hanwha SolarOne Co.
LDK offered to purchase Sunways, a solar-cell and module maker, for about 24.2 million euros ($31.4 million). A record 7,400 megawatts of solar capacity was installed in Germany in 2010. The two companies said yesterday the deal is expected to close by the end of the first quarter.
“We’re moving into a phase in the industry’s development where we’re going to see increased M&A,” Alex Morris, an analyst at Raymond James & Associates Inc. in Houston, said in an interview. “We’re in an oversupplied market right now, and some of these guys need to be taken out just to take some capacity off the table.”
Hanwha SolarOne rose 8 cents to $1.06 at the close in New York. Trina Solar Ltd. climbed 7.3 percent to $7.17, its biggest gain since Dec. 20.
German Chancellor Angela Merkel will host French President Nicolas Sarkozy in Berlin next week to prepare for the European council meeting on Jan. 30. Merkel said on Jan. 1 that she will “do everything to strengthen the euro.”
“Signs of stability in Europe may be considered a positive for the industry,” Daniel Ries, an analyst at Collins Stewart LLC in New York, said by telephone. “If the euro were to collapse this year, that would be very harsh for the solar industry, with the largest demand pool still in Europe.”
--Editors: Will Wade, Charles Siler
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