Engineering and electronics giant Bosch yesterday announced plans to acquire solar cell manufacturer Ersol, in a €1.1bn that further underlines the growing M&A activity impacting the market.

The company said yesterday that it had paid €546.4m for a 50.45 per cent in Ersol and had extended its €101 per share cash offer, a premium of over 60 per cent, to the firm's remaining shareholders. A further 3.3 per cent of Ersol's shareholders have already accepted the offer, according to Bosch.

The deal will give Bosch a significant presence in the world's largest solar energy market and take it into direct competition with long-standing rivals such as Sharp and Mitsubishi, which have invested heavily in building their own solar energy divisions.

Ersol is one of the largest solar manufacturers in Germany, specialising wafer-based silicon solar cells and thin film modules and boasting over 1,000 staff. The company said that it expects sales this year to almost double from €160m in 2007 to €300m in 2008.

Dr Helmut Vorndran, chairman of the supervisory board at Ersol and a spokesman for Ventizz, the private equity fund which sold its controlling stake to Bosch, said that the deal would provide the company with the support it needed to continue its recent growth. "After becoming a major and profitable solar producer over the past four years with a current production capacity of 180 MWp, the sale to a long-term oriented industrial partner is the best option for Ersol and the fund investors," he said.

Bosch said the deal underlined its commitment to renewable energy technologies – a sector it expects to generate €750m in revenue this year. Ersol is now expected to fit into a renewable technology portfolio that also includes the manufacture of wind turbine parts, heat pumps and organic photovoltaic technologies.

The deal led to speculation that growing numbers of multinationals were keen to enter the solar market, prompting a rise in the share price of several leading German solar firms.