Ballard Power Acquires ALSTOM Interest in BGS

Ballard Power Systems Inc. acquired the interest of ALSTOM Canada Inc. in Ballard’s stationary power subsidiary, Ballard Generation Systems Inc. (BGS) through the issuance of 2.5 million Ballard common shares. ALSTOM is subject to a minimum four-year hold period for 1.9 million of these shares, and to a standard four-month statutory hold period for the remaining shares. The value of the transaction, based on the share closing price on the completion of the transaction on December 18, 2002, was approximately $50 million.

Ballard’s relationship with the ALSTOM group will continue through a member of the group being granted a non-exclusive worldwide (except for Japan) distribution right for Ballard’s stationary fuel cell systems in place of the prior exclusive rights of ALSTOM BALLARD GmbH, based in Europe, to manufacture and distribute Ballard’s stationary fuel cell systems in Europe only. Additionally, ALSTOM BALLARD will continue to oversee the existing European 250 kW stationary field trial programme. ALSTOM BALLARD is owned 51 per cent by ALSTOM GmbH and 49 per cent by Ballard. After completion of this transaction and the pending purchase by Ballard of the interest of FirstEnergy Corp. (formerly GPUI) in BGS, Ballard will own 100 per cent of BGS.

Ballard was represented in-house by Stephanie Chan, manager, corporate transactions, and by Lang Michener in Vancouver with a team comprised of Amyn Abdula, Charlotte Olsen and Barbara Collins. Members of the ALSTOM group were represented in-house by Denise Van Hentenryk, senior vice-president and general counsel, and Aline Vandenbussche, legal advisor, and by Stikeman Elliott LLP with a team comprised of William Rosenberg, Peter Castiel and Sophie Lamonde (corporate) and Frédéric Harvey (tax).