Under the terms of the Purchase and Sale Agreement signed today, Toshiba will acquire 100% of Westinghouse. The extraordinary potential of this powerful combination has been met with immediate and positive reactions from several international companies involved in energy-related businesses. Toshiba expects to have several minority investors who wish to participate in this opportunity. Toshiba will retain more than 51% capital interest and remain the majority and controlling shareholder.
For Toshiba, the integration of Westinghouse and its extensive worldwide expertise in nuclear power generation and nuclear fuel has great significance in terms of taking Toshiba Group's energy-systems-related businesses to the next level. This powerful combination of Toshiba and Westinghouse's respective strengths and complimentary technologies and businesses will position the company as the world leader in the nuclear power business, with an unrivaled reach extending to both BWR and PWR systems.
Mr. Atsutoshi Nishida, President and CEO of Toshiba, said, "It is with pride and pleasure that we will start to work with Westinghouse, a prominent industry leader, in the strategic growth area of nuclear power. With Westinghouse, Toshiba will be a global nuclear power business organization committed to delivering world-class nuclear power generation systems and services, backed up by proven technology, reliability and superb efficiency."
Mike Parker, Chief Executive of BNFL, said, "We are delighted to have reached this agreement with Toshiba. It represents a truly unique opportunity for both companies. This partnership will provide Westinghouse with a truly global platform with new export opportunities that will enable us to compete more effectively for new U.S. customers. BNFL carefully considered which company would be the best for Westinghouse's business and is confident that Toshiba is the best choice."
Steve Tritch, President and CEO of Westinghouse Electric Company, said, "This is excellent news for Westinghouse customers and employees, because Toshiba has made it clear that they intend to invest in Westinghouse during this time of growing commercial nuclear power industry. This is a positive step in our ongoing journey to continually strengthen our position as the worldwide leader in our industry. Based on my personal interactions with Toshiba executives as part of the sale process, I believe they will be very good owners for our business."
Benefits of the Acquisition
This transaction will give Toshiba and Westinghouse the scale and technological capabilities required to be a strong global competitor in the nuclear sector. Drawing on the robust combination of technologies and operational expertise achieved by the acquisition, Toshiba will look to take advantage of a growing appetite for and acceptance of nuclear energy around the world. There is renewed global interest in nuclear energy, driven by concerns to secure stable electric power supplies, and to promote conservation and develop environmentally friendly technologies. Public awareness of the need for additional nuclear energy capacity is emerging in Europe and the United States, and the fast-growing Asian economies. China and other growing economies have already planned new investments in plant construction. This awareness is also stimulating further interest in the renovation of already commissioned plants. On the strength of these trends, the nuclear plant industry expects to see consistent growth in coming years. By 2020, the global market for nuclear power generation is expected to grow by 50 percent compared with today.
The combination of Toshiba and Westinghouse will create a global nuclear power business committed to delivering world-class nuclear power generation systems and services, backed up by cutting-edge technology, reliability and superb efficiency.
Upon completion of the acquisition, Toshiba expects its nuclear power business to expand to three times today's level by 2015, as a result of operational and technological synergies. Toshiba is a leader in BWR technology, with a strong presence in the Japanese market. Westinghouse enjoys a leading position in the world market with its PWR nuclear systems and its nuclear fuel businesses. The combination of Toshiba and Westinghouse will leverage capabilities in manufacturing, sales and marketing, and in engineering and R&D. The complementary partnership will go beyond the simple addition of the two businesses and reinforce the ability to enter new business areas where the companies have found it difficult to operate individually in the past.
Business operation after the stock acquisition
Toshiba will continue to extend its presence in the marketing, engineering, construction and maintenance of BWR nuclear power plant systems, and to strengthen global marketing of BWR and Advanced BWR systems.
Westinghouse will continue to operate from its headquarters in Pittsburgh, Pennsylvania. Westinghouse will retain its current intellectual property, equipment and employees, and necessary resources will be channeled to its operations to assure further business expansion. Development and marketing efforts for the AP1000 business will continue, focusing on winning new orders in the USA, China and elsewhere. Westinghouse will also continue to renovate commissioned nuclear power plants and to promote its nuclear fuel processing business.
Toshiba will work closely with Westinghouse's management team to develop future strategies, in order to maximize synergies and create new business opportunities.
Approvals and Timing
Toshiba and BNFL will complete the transaction subject to completion of all necessary procedures, including regulatory approvals.
About Westinghouse's nuclear business
Since it entered the nuclear business in 1957, Westinghouse has provided fuel, services, technology, plant design, and equipment to utility and industrial customers in the worldwide commercial nuclear electric power industry. To date, Westinghouse has installed a total of 98 nuclear power plants. At present, the company operates 34 facilities in 14 countries, and has a solid presence in the global market through marketing, design, construction, maintenance, and fuel processing for PWR systems.
Toshiba's nuclear business
Toshiba has consistently led the Japanese nuclear power generation industry since entering the nuclear power business in 1966. The company has promoted nuclear power business based on BWR systems, and is today the top supplier in Japan in terms of installed capacity base. The company's achievements to date include development and installation of Japan's first commercial reactor, installation of the first 1.1 million kilowatt plant, and management of the project to construct the world's advanced boiling water reactor (ABWR), Kashiwazaki Kariwa 6, in Japan's Niigata prefecture. Toshiba is committed to remaining at the cutting edge of technology development, and its far-sighted research activities include hydrogen fuel technologies. As a comprehensive system integrator, the company's wide-ranging activities cover the design, development and manufacturing of key components, such as nuclear reactors and control rods, and total systems, as well as engineering and maintenance and service of existing plants. In nuclear fuel, the company has contributed to the stable BWR supply of fuel in Japan for the last 35 years.
Toshiba has defined electronic device and digital products businesses as high-growth domains, and supports them with strategic, proactive investment in semiconductors and other promising fields. The company has also defined its power generation and social infrastructure systems businesses as stable growth businesses backed by substantial resources. The company decided to acquire Westinghouse in order to take an early lead in the promising global nuclear power plant industry.
Company outlines British Nuclear Fuel plc Established : 1971 (incorporated in 1984) Shareholders : UK Government Chief Executive : Mike Parker Sales : about 2,400 million UK pounds (2005; consolidated) Employees : about 23,000 Head Office : Daresbury, UK Westinghouse Electric Company Established : 1886 Shareholders : Owned by British Nuclear Fuels. plc through BNFL USA Group Inc. and Westinghouse Electric UK Limited. President and CEO: Steve Tritch Sales : about 1,100 million UK pounds (2005) Employees : about 8,000 Head Office : Monroeville, Pennsylvania, U.S.A.