Texaco, the third-biggest U.S. oil company, said it bought a 20 percent stake in Energy Conversion Devices, a developer of alternative-energy technologies such as fuel cells, for $67.3 million.
Texaco will work with Energy Conversion to develop fuel cells, which generate power through a chemical reaction combining hydrogen and oxygen and emit little air pollution. The companies also will develop technology to store solid hydrogen.
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Automakers and power generators, faced with growing pressure to reduce pollution, are experimenting with fuel cells as replacements for internal combustion engines and fossil-fuel power plants. Energy Conversion’s chairman is Robert Stempel, the former chairman and chief executive of General Motors Corp.
Energy Conversion’s shares rose 1 1/4 to 23 1/4, and Texaco’s rose to 50.
Energy Conversion, based in Troy, Mich., had 1999 sales of $29 million. White Plains, N.Y.-based Texaco, which had $36 billion in sales last year, will have two seats on Energy Conversion’s board.
Texaco is moving into power generation and energy technologies so its earnings won’t be as dependent on oil prices. Power demand is growing faster than total energy demand, Texaco Chairman Peter Bijur told shareholders last week.
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