Oct. 15 (Bloomberg) -- Siemens AG, Europe's largest engineering company, agreed to buy solar thermal power company Solel Solar Systems Ltd. for about $418 million to strengthen its portfolio of renewable energy products.
Siemens will buy the Beit Shemesh, Israel-based company from Ecofin Ltd., a London-based investment company specialized in utilities and infrastructure, and another shareholder it didn’t identify, the Munich-based company said on its Web site today. Siemens beat out Areva SA and Alstom SA, which also bid, according to people familiar with the process.
Solel develops and builds solar thermal power plants and makes solar receivers, a main component for the facilities that collect sunlight with mirrors to generate steam to power turbines. Solel employs more than 500 people and posted sales of almost $90 million in the first six months of this year. It has supplied solar fields in California and is supplying new plants in Spain.
Siemens Chief Executive Officer Peter Loescher is expanding in the solar energy market, an area the company predicts will grow more than 20 percent a year. Siemens and ABB Ltd. plan to use Solel technology in the $555 billion Desertec project in the Sahara Desert to bring electricity to European homes.
Siemens said on Aug. 28 it invested $15 million for a stake in Israeli solar company Arava Power Co., which runs a solar energy plant at Kibbutz Ketura north of Eilat. In March it bought a 28 percent stake in Archimede Solar Energy SpA and plans to take a majority holding in the Italian maker of solar receivers.
In fiscal 2008 Siemens generated about 19 billion euros, or almost a quarter of total revenue, from products in its so-called environmental business, including wind turbines, steam turbines for solar thermal power plants, water purification and technologies such as air pollution control.