Cummins Inc. (NYSE: CMI) closed its $290 million acquisition of Canadian fuel cell and hydrogen production technologies provider Hydrogenics Corp.(NASDAQ: HYGS) on Monday, Sept. 9.
It is the second major investment in fuel cell technology for commercial vehicles in a week.
On Sept. 4, United Kingdom-based CNH Industrial announced it was investing $250 million in startup fuel cell truck maker Nikola Corp., which plans to commercially produce Class 8 heavy-duty trucks by the end of 2022. Nikola also disclosed Sept. 5 that Robert Bosch LLC and solar panel maker Hanwha Group had invested a combined $230 million.
“There’s a growing realization that there is a lot of value in fuel cells for heavy-duty trucks in certain types of applications,” Navigant Research principal analyst Sam Abuelsamid told FreightWaves. “The infrastructure challenge is a lot less of an issue with commercial vehicles because a lot of the applications are return to base or fixed routes.”
Best known for its industry leadership in diesel engines for medium- and heavy-duty trucks, Cummins has worked on hydrogen fuel cells for two decades.
“Hydrogenics is one the world’s premier fuel cell and hydrogen production technology providers and their expertise and innovative approach will strengthen Cummins’ fuel cell capabilities,” said Tom Linebarger, Cummins’ chairman and CEO.
The purchase of all outstanding shares of Hydrogenics was announced June 28. The Hydrogen Company, a wholly owned subsidiary of French industrial gas producer L’Air Liquide S.A., will retain its 18.6% ownership in Hydrogenics. It paid $20.5 million for the stake in December 2018.
At the time, Hydrogenics entered into a technology and business development agreement with Air Liquide to jointly develop proton exchange membrane (PEM) electrolysis technologies for transportation applications.
“Owning both fuel cell and hydrogen generation from electrolysis capabilities will enable the company to offer a full, differentiated hydrogen solution, from start to finish, seamlessly integrated for customers,” Linebarger said.
Air Liquide said Cummins’ investment will help Hydrogenics accelerate its development.
“The two global companies, leaders in their sector, have complementary expertise in the development of hydrogen energy,” said Pierre Etienne Franc, CEO of The Hydrogen Company.
Hydrogenics will report under Cummins’ recently formed Electrified Power Business segment, which designs and manufactures full electric and hybrid powertrain systems, components and subsystems for commercialization of electrification. Hydrogenics will continue to be headquartered in Mississauga, Ontario, Canada.
Cummins’ shares closed up $5.90, or 3.81%, at $160.82 on Monday.