Toshiba to acquire Westinghouse for $5.4 billion

Toshiba Corp. is buying Westinghouse, the power plant division of British Nuclear Fuels PLC, for US$5.4 billion in a deal that will significantly expand Toshiba’s nuclear systems business, the Japanese company announced Monday.

Under terms of the deal, Toshiba will acquire all of Westinghouse Electric UK Ltd. and also is acquiring BNFL USA Group Inc. 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 percent 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 said 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 pressurized 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 said.

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

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