(Yicai) Feb. 17 -- Tongwei, the world's leading solar polysilicon maker, has given up its attempt to acquire Jiangsu Runergy New Energy Technology, the fifth-largest solar cell supplier, after they failed to agree on specific commercial terms. The decision ends what would have been the solar sector's biggest merger.

Despite ending the agreement, Tongwei will offer support to Runergy's polysilicon business in the future by providing technical and management services, the Chengdu-based company said.

Runergy, which has yet to go public, was the world’s fifth-largest solar cell supplier in 2023, and ranked third in the world from 2020 to 2022, according to PVInfoLink statistics. The Yancheng-based company also produces around 130,000 tons of polysilicon a year.

Last August, Tongwei offered up to CNY5 billion (USD689 million) for a 51 percent stake in Runergy, through a combination of capital injection and share acquisition, in what would have been the largest merger and acquisition transaction in the solar industry amid a sluggish market.

The tie-up will form business synergy between Tongwei and Runergy, consolidate Tongwei’s leading market position in core business segments, including high-purity silicon and high-efficiency solar cells and panels, improve the company’s overseas manufacturing layout and expand its sales network in high-premium markets, Tongwei said at the time.

Big players in the PV industry, including Tongwei and Runergy, have all been affected by a major supply glut, which drove down the price of products across the whole industrial chain last year. Tongwei is projecting net losses of up to CNY7.5 billion (USD1 billion) for 2024, compared with net profit of CNY13.6 billion (USD1.8 billion) in 2023.

Due to this pressure on performance, Runergy has been plagued by rumors since August last year that it will shutter some of its overseas factories. The firm operates plants in the US, Thailand and Vietnam in addition to those in China. Several industry insiders have confirmed these rumors to Yicai.

Tongwei’s share price [SHA:600438] was trading up 0.7 percent at CNY21.63 (USD3) as of 1 p.m.

Editors: Tang Shihua, Kim Taylor