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UTC buys remaining shares in struggling Clipper

Clipper Windpower has agreed to a US$223 million buyout by United Technologies Corporation as its struggles continue.

UTC will gain control over the 50.1% stake in Clipper it does not already own and will provide an additional loan facility to assist with cash flow ahead of the transaction.

According to the Reuters news agency, Connecticut-based UTC will pay 65 pence a share, a 48% premium over Clipper's closing price on 17 September, the last business day before Clipper announced the approach.

"For Clipper right now this buyout by UTC is phenomenal. It gives them a significant cash injection to fight against some of its peers in this tough environment," Libertas Capital analyst Titus Menzies was quoted by Reuters. Falling gas prices in the U.S. and government austerity measures are likely to weigh on demand for wind energy in the U.S. over the coming years, analysts said.

But Mark Chaichian, Clipper's business development director, said he was confident the deal would make good sense for UTC in the long term.

"The outlook for the sector if you believe the markets is going to be a little rough in the short term," said Chaichian.

"The renewable sector as a whole is a pretty important agenda for government, and certainly in the U.S. so this transaction will make a lot of sense for UTC on a three to five year view," he said.

Chiachain said Clipper would focus on developments in South America and Eastern Europe as well as in the U.S.

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