India’s Lanco “Open” to Deals as Solar Industry Poised for Consolidation

Lanco Infratech Ltd. (LANCI), set to emerge as India’s biggest builder of solar power plants, said it’s willing to consider overseas acquisitions amid signs the industry is poised for consolidation.

“There’s a shake-up happening in the solar industry,” said V. Saibaba, chief executive officer of Lanco Solar Pvt., a unit of India’s largest non-state power producer. “If any interesting opportunities come our way, we are definitely open to it.”

Clean-energy companies are likely to become the most active in merger and acquisitions as conglomerates seeking to enter the sector could find cheap targets in a fragmented industry, said Morgan Stanley analyst Allen Wells in a May 16 note. Last month Total SA (FP), Europe’s third-largest oil company, made the largest purchase ever of a solar cell and module maker with a $1.38 billion deal for 60 percent of SunPower Corp. (SPWRA), said Nathaniel Bullard, solar analyst at Bloomberg New Energy Finance.

Smaller companies may come under pressure to find buyers in Europe, where tariffs paid to renewable energy generators are falling, and China, whose equipment suppliers face declining prices, Saibaba said.

“It will be difficult for many of the small companies to go to the next level,” Saibaba said in an interview in Gurgaon, near the capital of New Delhi on May 27.