Toshiba buys Westinghouse for $5.4 billion
06 February 2006
Toshiba expects to close the deal within six months and does not anticipate any regulatory hurdles in the US. Westinghouse will keep its headquarters in Pennsylvania, as well as its equipment, employees and trademarks.
Westinghouse is the US power plant arm of British Nuclear Fuels and has been under the British company''s fold since being acquired for $1.1 billion in 1999. It has annual sales of $1.8 billion and employs 9,000 people. BNFL operates four active UK power stations and seven that are being decommissioned.
Also in the fray to acquire Westinghouse were General Electric and Mitsubishi Heavy Industries since the middle of last year when the British company had decided on the sell-off. Toshiba was selected after multiple rounds of bidding that began with 14 interested companies, including General Electric Co. and Mitsubishi Heavy Industries.
The Japanese electronics giant emerged as the preferred bidder, paying three times the amount BNFL had originally expected to raise from the Westinghouse sell-off.
Toshiba, which makes electronic goods including DVD players, semiconductors, electric motors and power systems, is preparing for an expected surge of new investment in power plants in China, India and the US. Westinghouse, which has built most of the nuclear reactors in the United States, is likely to design the plants and service them as and when they materialise.
The Japanese giant believes that looking at the future growth and profit potential of the business, the price being paid for Westinhouse was right one.