Cummins makes $290m deal with fuel cell developer Hydrogenics

Engine giant Cummins has bought the majority of shares in Canadian-based hydrogen fuel cell developer Hydrogenics Corporation for US$290 million.

Hydrogenics is one of the world’s leading fuel cell and hydrogen production companies and the deal is expected to strengthen Cummins’ fuel cell projects.

Cummins chief executive and chairman Tom Linebarger says he is “thrilled to welcome the Hydrogenics employees to the Cummins family”.

“This is another step forward as we continue to invest in a broad range of clean, fuel-efficient and high-performing products and technologies that deliver value to our customers.”

Cummins started developing its fuel cell capabilities more than 20 years ago and it’s set on further innovation to bring the technology into the commercial market.

The deal also has the support of global gases, technologies and services company Air Liquide which has a 19% stake in Hydrogenics.

Air Liquide vice president and Hydrogen Company chief executive Pierre Etienne Franc says everyone involved believes hydrogen has a “key role” to play.

“As a shareholder, and more widely as a company, Air Liquide is highly supportive of a hydrogen-based society.

“The two global companies, leaders in their sector, have complementary expertise in the development of hydrogen energy. Thanks to Cummins’ investment, we believe Hydrogenics technologies will be able to accelerate significantly their development,” Etienne Franc says.

Hydrogenics will be delisted from the Toronto Stock Exchange and the NASDAQ following completion of the deal.

Cummins forecasts that the company will return 75% of operating cash flow to shareholders this year in the form of dividends and share repurchases. The acquisition was completed for US$15 per share.

Hydrogenics will report under Cummins’ electrified power business segment led by Thad Ewald and its operations will continue to be headquartered in Mississauga, Canada.