South Korea's Hanwha Chemical will acquire a 49.99 percent stake in Chinese photovoltaic (PV) cell maker Solarfun Power Holdings Co for 434 billion won ($370 million) to expand into a new business.
In a joint statement, Hanwha and Solarfun said Hanwha would pay $10.72 per American Depositary Share, or a 4.6 percent premium to Monday's closing price.
Hanwha said the deal was also aimed at securing production capacity in the fast-growing Chinese market.
Solarfun is the world's fourth-largest solar module producer with 900 megawatts annual capacity and counts Energie Baden-Wuerttemberg (EBKG.DE), Germany's third-largest utility, among its clients.
The deal marks the latest attempt by Hanwha's parent, chemicals-to-construction conglomerate Hanwha Group, to raise its profile through acquisitions and public offerings.
Hanwha Chemical shares closed up 3.7 percent at 21,250 won on Tuesday and shares of Solarfun, which jumped 40 percent over the past one month, closed at $10.25 on Monday.
Solarfun CEO Ping Peter Xie said in a statement: "With its substantial financial resources, extensive global relationships and proven expertise in building energy projects, the relationship with Hanwha will be invaluable to Solarfun as we continue to grow our business and penetrate new markets."
Hanwha said the final deal was expected by end-October.
