Sale To Toshiba
In July 2005 BNFL confirmed it planned to sell Westinghouse, then estimated to be worth $1.8bn (£1bn). However the bid attracted interest from several companies, including Toshiba, General Electric and Mitsubishi Heavy Industries and when the Financial Times reported on January 23, 2006 that Toshiba had won the bid, it valued the company's offer at $5bn (£2.8bn). On February 6, 2006 Toshiba confirmed it was buying Westinghouse Electric Company for $5.4bn and announced it would sell a minority stake to investors. The sale surprised many industry experts who questioned the wisdom of BNFL selling one of the world's largest producers of nuclear reactors shortly before the market for nuclear power was expected to grow substantially; China, the United States and the United Kingdom were all expected to invest heavily in nuclear power. However The Economist gave several reasons in favor of a sale. The commercial risk of the company's business in Asia may be too high for a company owned by taxpayers. Moreover, if Westinghouse won the bid for any new nuclear stations in a UK competition, questions may be raised of favoritism, but if it lost, it may be seen as a lack of faith in its own Westinghouse technology. Finally, the record of UK governments building nuclear plants had been a commercial disaster.
The acquisition of Westinghouse Electric Company for $5.4 billion was completed on October 16, 2006, with Toshiba obtaining a 77% share and partners The Shaw Group a 20% share and Ishikawajima-Harima Heavy Industries Co. Ltd. a 3% share. On 13 August 2007 Toshiba sold 10% to Kazatomprom, the national uranium company for the Republic of Kazakhstan, for US$540 million. Kazatomprom's ownership is entirely passive, with no voting or veto rights or even a presence on the board of directors.
In September, 2011, Toshiba was reported to be in talks to acquire the Shaw stake and both companies confirmed the story soon thereafter. Toshiba is paying US$1.6 Bn for the 20% stake under a Shaw-owned option, Shaw CEO James Bernhard said. Shaw said it was the 50% rise in the yen on its yen-denominated debt over five years which led it to exercise its sale option. The option was part of the 2006 purchase terms. Toshiba said it was open to, and considering, having other partners invest in the business. The purchase brings Toshiba's share in company to 87%.
Read more about this topic: Westinghouse Electric Company
Famous quotes containing the word sale:
“People buy their necessities in shops and have to pay dearly for them because they have to assist in paying for what is also on sale there but only rarely finds purchasers: the luxury and amusement goods. So it is that luxury continually imposes a tax on the simple people who have to do without it.”
—Friedrich Nietzsche (1844–1900)