Heralds the Dawn of a New Era for Nuclear Energy
TOKYO, Oct. 17 /PRNewswire/ -- Toshiba Corporation today announced its
acquisition of BNFL USA Group Inc. and Westinghouse UK Limited
(collectively Westinghouse), following completion of the final arrangements
with British Nuclear Fuels Limited on October 16, US Eastern Standard Time.
Westinghouse Electric Company is now a Toshiba Corporation consolidated
group company.
The integration of Westinghouse into Toshiba, along with its extensive
expertise in nuclear power generation and nuclear fuel and worldwide market
presence, is of great significance in terms of taking Toshiba Group's
energy systems business to the global level. The powerful combination of
Toshiba and Westinghouse's respective strengths, complementary technologies
and businesses, will position Toshiba as the world's leading nuclear power
group, with an unrivaled business range extending to both BWR*1 and PWR*2
systems.
Toshiba established two holding companies in the U.S. and the U.K.,
Toshiba Nuclear Energy Holdings (US) Inc. and Toshiba Nuclear Energy
Holdings (UK) Limited, to carry out the acquisition. Through these holding
companies, Toshiba has invested US4,158 million dollars in acquiring a 77
percent share of Westinghouse, giving Toshiba management control of the
company. The remaining 23% is held by two strategic partner companies: the
Shaw Group Inc. of the USA invested US1,080 million dollars in a 20% stake,
while Japan's Ishikawajima-Harima Heavy Industries Co., Ltd. (IHI) invested
US162 million dollars in a 3% stake. Toshiba discussed capital
participation with potential partners in terms of mutual understanding of
long-term business strategy, a shared market vision, and complementary
relations and maximized synergies in conducting business. Toshiba continues
discussions with several potential partners.
Following the acquisition, Westinghouse will retain its operating
autonomy and remain headquartered in Pennsylvania. By strengthening
Westinghouse's operational structure to maximize synergy with Toshiba and
its partners, Toshiba will seek to promote the expansion of Westinghouse's
business.
*1 BWR: Boiling Water Reactor, a reactor developed and commercialized
by General Electric of the U.S.
*2 PWR: Pressurized Water Reactor, a reactor developed and
commercialized by Westinghouse of the U.S.
Significance of the Acquisition
There is renewed global interest in nuclear energy, driven by concerns
to secure stable electric power supplies, promote conservation, and develop
environmentally friendly energy technologies. Public awareness of the need
for additional nuclear energy capacity is emerging in the United States and
Europe, and in the fast-growing Asian economies. China and other growing
economies have already planned new investments in plant construction. There
are currently 439 nuclear power plants in operation worldwide, and demand
for nuclear energy is expected to grow, as it complements the
resource-saving and recycling-oriented society of the 21st century. From
2002 to 2020, the global nuclear energy market is expected to grow
130-gigawatt, equivalent to 130 1- gigawatt plants, the typical plant size
anticipated in future.
Toshiba is a leader in BWR technology, with a major presence in the
Japanese market. Westinghouse enjoys a leading position in the world market
with its PWR nuclear systems. 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.
By integrating Westinghouse's operations and promoting operational and
technological synergies, Toshiba expects sales in its nuclear power
business to expand to 700 billion yen by 2015 and 900 billion yen by 2020,
compared with 200 billion yen today.
Operational Structure after Acquisition
Toshiba's policies on Westinghouse's operation are: 1. Toshiba has
majority ownership; 2. maximize complementary synergy with partners; and 3.
maintain and strengthen Westinghouse's ongoing operations. The operational
structure will be as described below.
1. By holding voting rights in proportion to its investment ratio
through the holding companies in the U.S. and U.K., Toshiba has majority
ownership of Westinghouse. Mr. Masao Niwano, a representative executive
officer and corporate senior executive vice president and director of
Toshiba Corporation has been appointed president of the board of both
holding companies.
2. The holding companies will have an "owner board" comprised of
representative of the three partners. This organization will serve as an
advisory body to the holding companies, with the role of coordinating views
among the partners and making recommendations to the board of the holding
company. Mr. Niwano will chair the owner board.
3. Westinghouse Electric Company, the core of Westinghouse, will
continue to operate from its headquarters in Pennsylvania. Mr. Steve Tritch
will remain CEO of Westinghouse.
4. The board of directors of Westinghouse Electric Company will have
seven members, three from Westinghouse Electric Company, and four from
Toshiba (two of whom will be part-time directors).
5. In order to promote complementary relations and enhance synergetic
collaboration, Toshiba will establish a coordination office in Westinghouse
Electric Company. Personnel will be assigned from Toshiba and its partner
companies, and the chief coordination officer (CCO) will be appointed by
Toshiba.
6. In Toshiba's Power Systems Company, the Nuclear Energy Systems &
Services Division will continue to be responsible for promoting the BWR
business. A WEC Coordination Division will be established to collaborate
with the coordination office at Westinghouse Electric Company.
Outline of Westinghouse Electric Company
Established: 1886
President and CEO: Steve Tritch
Sales: Approximately US$2 billion*1
Employees: About 9,000*1
Head Office: Monroeville, Pennsylvania, U.S.A.
*1 Sales and employees at Westinghouse, including Westinghouse Electric
Company
SOURCE Westinghouse Electric Company
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