Toshiba to acquire Westinghouse for US$5.4 billion

Toshiba aims at taking the lead in the global nuclear power plant industry

Toshiba is buying Westinghouse, the power plant division of British Nuclear Fuels, for US$5.4 billion (NZ$7.9 billion) in a deal that will significantly expand Toshiba's nuclear systems business, the Japanese company announces.

Under terms of the deal, Toshiba will acquire all of Westinghouse Electric UK and also is acquiring BNFL USA Group from British Nuclear Fuels. Toshiba has lined up minority investors, who were not identified, to take part in the deal, with Toshiba retaining more than 51% of Westinghouse and serving as the majority and controlling shareholder.

Toshiba has been in the nuclear power business since 1966, focused on boiling water reactor, or BWR, technology, and is the top supplier in Japan as far as its installed capacity base, the company says in a statement announcing the deal. Westinghouse has been in the nuclear business since 1957 and has installed 98 nuclear power plants, operating 34 facilities in 14 countries. Its focus is on pressurised water reactor, or PWR, technology.

The decision to buy Westinghouse is aimed at helping Toshiba "take an early lead in the promising global nuclear power plant industry," Toshiba says.

Westinghouse will still be based in Pittsburgh and will keep its current intellectual property, equipment and employees, Toshiba says.

Globally, Toshiba is perhaps best known for its digital products, including TVs and PCs. For the nine-month period that ended December 31, 2005, the company reported operating income of ¥115 billion or US$974.7 million (NZ$1.4 billion), led by the digital products division.

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