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Ballard buys Alstom's stake in generating unit

VANCOUVER, British Columbia, Dec 18 (Reuters) - Fuel cell maker Ballard Power Systems Inc. said on Wednesday it had moved closer to taking full control of its stationary power generator subsidiary, buying the 18 percent stake held by Alstom , the French engineering group.

Ballard said it paid Alstom 2.5 million Ballard shares for the stake in Ballard Generation Systems. The shares were trading at C$18.70 in Toronto and $12.041 on Nasdaq at midday on Wednesday.

Ballard last year bought out a stake in the unit held by Japan's Ebara and has a deal in place to purchase a stake held by FirstEnergy Corp . It will then own 100 percent of Ballard Generation.

The deal with Alstom is similar to the one reached with Ebara. The French engineering firm is required to keep all of its Ballard shares for four months, and 1.9 million of them for at least four years.

Alstom's will now have non-exclusive rights to market Ballard stationary fuel cell systems in all countries except Japan. It previously had exclusive marketing rights in Europe.

Commercial marketing of the first stationary generating units using Ballard fuel cells is expected to begin next year, although the power output of the product has not been announced.

Ballard is also developing fuel cells for use in portable generators and vehicles. The cells use a chemical process to produce electricity from hydrogen, and are seen as a green alternative to standard combustion systems.

Ballard also said on Wednesday that the underwriting syndicate that will buy all 7.7 million shares of an equity offering announced last week will not to exercise its option to buy an additional 1.9 million shares.

The shares are being sold to the syndicate, led by RBC Capital Markets and CIBC World Markets, at C$20.25 in Canada and $13.016 in the United States in a deal that will give Ballard gross proceeds of $100.2 million.

($1=$1.55 Canadian)