Amazon (AMZN) has been granted warrants to purchase up to $340 million U.S. worth of stock in power provider Generac (GNRC).
In a regulatory filing, Generac said that it issued warrants enabling Amazon to buy up to 1.69 million shares at $200.93 U.S. a piece for a total investment of as much as $8 billion U.S.
News of the deal has Generac’s stock up 30% in premarket trading on Sept. 17. At one point, the stock was up more than 40%.
As part of the arrangement, Generac will supply Amazon with backup power generators for its data centres, with initial deliveries expected to total $2.4 billion U.S. in 2027 and 2028.
About 308,000 of warrants are available to Amazon immediately and the remaining tranches vest contingent upon Generac receiving payment for its generators.
The warrants are equivalent to almost 3% of outstanding shares in Generac, which has a market capitalization of $10.33 billion U.S.
This is the latest artificial intelligence (A.I.) data centre infrastructure deal for Amazon. Last week, the technology giant struck a deal with Qualcomm (QCOM) to use its custom microchips.
As part of that deal, Amazon received warrants to buy as much as $4 billion U.S. in Qualcomm stock.
Amazon, which is the leader in cloud computing, is building out its data centre capacity to meet a surge in demand tied to the A.I. boom.
GNRC stock has declined 60% over the last five years to trade at $175.11 U.S. per share. The company mostly supplies back-up generators to residential homes.
AMZN stock has gained 42% in the past five years to trade at $245.96 U.S. a share.
Related Stories
