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(Bloomberg) — Chinese solar wafer maker TCL Zhonghuan Renewable Energy Technology Co. has purchased a majority stake in smaller rival DAS Solar Co., the latest sign of consolidation in an industry wrought by overcapacity and a persistent supply glut.
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TCL Zhonghuan said in a letter to customers on Monday that it completed the acquisition of DAS Solar, a manufacturer of solar cells and modules based in Zhejiang province, on July 2. “This integration strengthens our capabilities across the entire photovoltaic value chain from silicon wafers and cells to modules,” the company said.
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TCL Zhonghuan first unveiled the deal in March, saying in an announcement to the Shenzhen Stock Exchange that it would spend 1.26 billion yuan ($186 million) on a 66.34% stake in DAS Solar. At the time, the company said the purchase was a response to the government’s call for leading solar firms to improve the sector’s development and competitive landscape.
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The move comes at a critical time for China’s solar industry, which is seeking to unwind years of reckless expansion during a cutthroat race to build up market share. Manufacturers themselves have called for government assistance after their own efforts failed to curb excess capacity or deliver a meaningful recovery in prices. Last month, the government rolled out three national standards for the solar industry that will take effect from Jan. 1.
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TCL Zhonghuan’s acquisition follows a similar deal announced in February, when Tongwei Co. said it planned to buy privately held Qinghai Lihao Qingneng Co.
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The latest deal also expands TCL Zhonghuan’s footprint beyond solar wafers. In a filing earlier this month, the company said the transaction would allow it to “rapidly and efficiently” establish 20 gigawatts of solar-cell manufacturing capacity and 50 gigawatts of module-production capacity.
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