Ballard sells automotive assets to Ford and Daimler

Ballard Power Systems Inc is exiting the automotive fuel cells business with the sale of its automotive-related assets to Ford Motor Co and Daimler AG for between $95 million and $105 million. The move is expected to reduce the Burnaby BC-based company's R&D burn rate by $15 million annually as it shifts focus to other commercial applications such as fork lifts and power back-up systems. Automotive fuel cell development will continue via a new private company to be located at Ballard's facilities. It will be 50.1% owned by Daimler, with Ford taking a 30% share and Ballard owning a 19.9% share. Daimler and Ford will contribute $60 million. Ballard will match that amount but will not be obligated to provide ongoing funding. It will receive rights to use automotive intellectual property in non-automotive applications.

In FY06, Ballard ranked #41 on the Top 100 Corporate R&D Spenders list with outlays of $59.3 million, down 35.2% from FY05. Ballard has spent more than 20 years and hundreds of millions of dollars (public and private) developing automotive fuel cells. But the prospect of many more years of high R&D costs before the emergence of viable commercial products prompted the publicly listed company to shift to applications closer to the market....