AEA Technology has sold its nuclear engineering business to Nukem Nuclear, the UK arm of Germany’s Nukem Nuklear, for £23.7 million. The contracts are subject to final approvals by the UK nuclear regulator and the ultimate transfer of staff is expected later in the summer. AEA had made the decision to sell its nuclear interests at the end of 2000.
The move is part of a disposal of its non-core operations. AEA will use the capital to fund the repayment of debts, the return of a significant sum to shareholders, and the expansion of its rail and environmental services businesses. The decision to sell off some of its divisions individually ended takeover talks with potential buyers for the company. The struggling former commercial arm of the UK’s Atomic Energy Authority is currently in negotiations over the sale of its engineering software business, Hyprotech.
Recently AEA has suffered from a decrease in nuclear decontamination orders from BNFL, a delay in battery orders from the Ministry of Defence and fewer oil industry orders than expected. The company was floated at 280p a share in November 1996 and hit a high of £10.29 in 1998. The announcement of the end of takeover talks brought the price up by 25%, back to just above the flotation price.
The group has branched out from its original nuclear engineering, decommissioning and waste management roots into rail and environmental services. The group has been criticised for a lack of management focus and too wide a range of interests.
Nukem Nuclear’s acquisition will result in an annual turnover in excess of £50 million. Nukem’s main activities are focused on the decommissioning of nuclear facilities, the treatment of radioactive waste, and fuel cycle services.