Toshiba Said to to buy more than 50 percent of Nuclear Fuel Industries
– Edited by April Murelio –
Bloomberg reported this morning that Toshiba Corp., Japan’s largest supplier of reactors, plans to buy a controlling stake in a nuclear fuel supplier to help compete with global rivals for new atomic power plants.
Toshiba wants to own a stake in Nuclear Fuel Industries partly because of concern that the company may be pushed out of another fuel venture with General Electric and Hitachi, an official said. Toshiba and Hitachi each own 24.5 percent of Global Nuclear Fuel Japan Co. while General Electric holds 51 percent. General Electric and Hitachi merged their nuclear energy business in July 2007, a year after Toshiba bought Westinghouse.
According to officials close to the deal, Toshiba’s Westinghouse Electric Co. seeks to buy more than 50 percent of Nuclear Fuel Industries Ltd. from Sumitomo Electric Industries Ltd. and Furukawa Electric Co. Yuichiro Horiba, a spokesman at Osaka- based Sumitomo Electric confirmed the negotiations and said the companies have yet to reach a decision. Improved access to fuel may help Toshiba win contracts as competition with France’s Areva SA and an alliance between Hitachi Ltd. and General Electric Co. intensifies.
“It’s more profitable to package reactors with the fuel,” Fujii Tomoyuki, an analyst at Okasan Securities Co., told Bloomberg by phone from Tokyo today. “Customers don’t want to take risks associated with the nuclear fuel business, and offering them together will help win orders.”
Toshiba spokeswoman Hiroko Mochida and Furukawa spokesman Toshinori Kimura did not to comment. The Yomiuri newspaper reported yesterday that Toshiba will buy all of Nuclear Fuel Industries at a cost of more than 20 billion yen ($205 million).
Toshiba wants to buy a stake in Nuclear Fuel Industries partly because of concern that the company may be pushed out of another fuel venture with General Electric and Hitachi, one of the officials said. Toshiba and Hitachi each own 24.5 percent of Global Nuclear Fuel Japan Co. while General Electric holds 51 percent. General Electric and Hitachi merged their nuclear energy business in July 2007, a year after Toshiba bought Westinghouse.