Timminco (32T.DE) has agreed to form a joint venture with Dow Corning Corporation at its silicon metal production facilities in Bécancour, Québec. Dow Corning will acquire a 49% equity interest in a new joint venture entity that will own the existing silicon metal operations of Timminco’s subsidiary, Bécancour Silicon Inc. (BSI).
In exchange, BSI will receive net cash proceeds of US$39.7 million on closing, and up to potentially an additional US$10.0 million after closing subject to achieving certain performance objectives relating to production cost and capacity improvements.
BSI will retain a 51% equity stake in the Joint Venture. All of the production output of the Joint Venture, which will be based on an initial annual production capacity of 47,000 mt of silicon metal, will be split between BSI and Dow Corning proportional to their ownership interests. All of BSI’s solar grade silicon purification operations and facilities at the Bécancour site will remain with BSI.
"This acquisition is well aligned with Dow Corning’s global strategy of securing an efficient supply of this critical raw material used to manufacture all of our silicon-based products," said Robert Hansen, Dow Corning’s executive vice president and general manager of Core Products.
The Joint Venture, which will be known as "Québec Silicon", will acquire from BSI all of the silicon metal production assets, including property, plant, equipment, and certain net working capital items, and BSI’s quartz mining lease in Lac Malbaie, Québec.
The creation of the Joint Venture and the closing of Dow Corning’s acquisition is expected to occur on or about September 30, 2010.
Dow Corning is a joint venture equally owned by The Dow Chemical Company (NYSE: DOW) and Corning, Inc. (NYSE: GLW).
In April, Dow Corning signed a three-year contract with Belgium-based research firm imec to perform joint research on next generations of crystalline silicon solar cells.
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