Toshiba’s bid of almost $5 billion for ownership of Westinghouse has been approved by BNFL directors, according to a Financial Times report. A board meeting later this week is expected to officially rubber-stamp the deal.
The $5 billion purchase price of Westinghouse was inflated by high hopes for the deployment of its AP1000 pressurised water reactor
It was announced in July 2005 that BNFL, the UK’s state-owned nuclear group, would divest itself Westinghouse. At that time, the expected price was around $1.8 billion, but intense competition between buyers was to increase that sum by a factor of more than two. BNFL acquired Westinghouse in 1999 for $1.1 billion, adding to it the nuclear business of ABB that it purchased for $485 million a year later.
The sale will also include BNFL’s 22.5% holding in the pebble bed modular reactor (PBMR) project. South Africa’s state-owned Eskom is planning to begin construction next year of a demonstration PBMR unit at the Koeberg site near Cape Town.
The resurgence of global interest in nuclear power has also helped increase the value of the sale. Westinghouse is currently looking forward to possible orders for its AP1000 reactor design in China and the USA. In addition, the design’s deployment has been studied in the context of the UK market.
Toshiba’s competitors in the final stages of the bidding war were partnerships between General Electric (GE) and Hitachi, and Mitsubishi Heavy Industries together with the Washington Group.
Antitrust issues and national strategies played an important part in the process. French state-owned giant Areva was thought to have been interested in purchasing Westinghouse but wary of US antitrust action in the face of a consolidation of pressurised water reactor technology. At the same time US legislators were known to favour a US bid such as that by GE. US commerce secretary Carlos Gutierrez wrote to UK trade and industry secretary Alan Johnson in support of GE’s bid, and US president George Bush personally lobbied UK prime minister Tony Blair.
As a sweetener to US politicians, Toshiba is expected to invite a US company to take a minority stake in Westinghouse. The Shaw Group, once counted as a potential buyer, would be expected to take that position.
Related ArticlesUK under pressure to approve new nuclear plants UK energy review announced to protest Wicks waxes nuclear Britain's fading lights Arrested development UK nuclear policy U-turn UK government backs nuclear......provisionally Blair 'open' over nuclear futureExternal weblinksNuclear Engineering International is not responsible for the content of external internet sites.Greenpeace's Friday the13th film
