The two automakers will give up all their current Ballard holdings, 34.3 million shares, which Ballard will then cancel. The shares are worth $168 million, based on a 20-day average preceding the sale.
As part of the deal, Ballard will put $60 million into a new private company that will be majority-owned by Daimler. With that investment, Ballard said it expects to gain an estimated $95 million to $105 million from the deal.
Ballard (NSDQ: BLDP) shares rose 5.95 percent to $5.50 per share on the news.
The Vancouver-based company said Tuesday it was negotiating with the two automakers after a story in the German business journal WirtschaftsWoche -- picked up by Reuters -- claimed that Daimler had agreed to buy the business segment (see Ballard Auto Business For Sale).
Analysts said the purchase is a sign that Daimler and Ford see potential in fuel-cell technology for cars, despite a long history of delays.
"I wouldn't see why large car manufacturers would purchase something like this if [the technology] wasn't going to go anywhere," said Sara Bradford, a senior analyst for the research firm Frost & Sullivan, who thinks fuel cells will make it into the automobile market one day.
It might also be evidence that larger players are needed because it could take fuel cells longer than expected to reach that market.
On Thursday, Hydrogenics Corp., a Toronto-based company that develops hydrogen- and fuel-cell products, said it would shut down the part of its business that designs, develops and manufactures fuel-cell test products. The "orderly windup" of the Burnaby, British Columbia-based business is expected to take two years and cost between $3.5 million and $4 million.
As for the Ballard deal, the company said selling its automotive segment will bring it to profitability more quickly, reduce its shares by about 30 percent and reduce its financing needs. In addition, Ballard will retain the right to use automotive fuel-cell technology in nonautomotive applications and to pursue fuel-cell buses.
In exchange for their shares, Daimler and Ford will get automotive intellectual property, 113 employees that make up 20 percent of Ballard's team today and test equipment and inventory worth $6 million.
The three companies are setting up a new private company to develop automotive fuel-cell technologies.
The company, initially funded by $60 million from Daimler and Ford, along with the $60 million from Ballard, will operate at Ballard's offices. Daimler will own 50.1 percent of the new private company, while Ford will own 30 percent and Ballard – which will not have to provide any further funds -- will own 19.9 percent.