Monday, February 06, 2006

Westinghouse Goes to Toshiba

An event that had been talked about for a few weeks finally came about today, as Toshiba announced that it had completed an agreement with British Nuclear Fuels to acquire Westinghouse. The final price tag: $5.4 billion (U.S.):

``Given the potential we believe what we've paid is the correct price, there was a lot of competition,'' Atsutoshi Nishida, Toshiba president, said today during a press conference in London. The acquisition will triple Toshiba's nuclear energy business, he said.

Toshiba is seeking to expand its power plant operations as the company expects the market for atomic energy to expand by 50 percent by 2020. Westinghouse will give Toshiba the pressurized water reactor technology preferred by China, which may spend as much as $54 billion by that year building nuclear stations.

The price paid for the business, up from $3.2 billion during an auction three weeks before Toshiba was chosen last month as the preferred bidder, is almost five times the $1.1 billion the U.K. government paid for Westinghouse in 1999. Toshiba trumped bids from companies including General Electric Co. and Mitsubishi Heavy Industries Ltd.
Toshiba also announced that it would be selling portions of Westinghouse to a number of minority investors, but that Toshiba would still retain control of at least 51 percent of Westinghouse.

For more from Toshiba, read their official press announcement.

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5 comments:

Anonymous said...

It's sad, in a way, to see another of these former industrial giants in the US, icons of a former role as leader of the world in manufacturing, being sold out in the foreign marketplace. Westinghouse Electric Co. was an innovator in many ways, being involved in the early development of AC power distribution, manufacturer of generators and steam supply systems, appliances, and other consumer goods. Today it is a shadow of it's former self. The business paradigm currently in vogue in this country, which seems to be sell everything out to foreigners to increase short-term "profits", lacks a long-term vision. Selling out for a quick buck often leaves nothing behind to build on.

Matthew66 said...

US companies are not backward in coming forward when it comes to buying foreign firms, so one ought not to complain too loudly when a foreign company buys a former US company. Westinghouse has been foreign owned since 1999 when it was purchased from CBS by British Nuclear Fuels Limited, which is wholly owned by the British Government. At least now it is not owned by a foreign government. It is also likely that Toshiba will sell minority interests to US companies.

General Electric bid for Westinghouse, although I suspect that even if it had been the highest bidder, GE would have lost on the grounds that a merger would significantly reduce competition for the supply of new reactors to the US market.

Anonymous said...

I think ABB owned it before BNFL. But it's true that it is kind of distrurbing to see these former giants of US industry being sold out to foreigners. It took a lot of hard work to build what we have (had). It's unfortunate that things have come to pass that Americans would rather sell out than build up.

Anonymous said...

It is sad to see a company such as Westinghouse that had such great potential -- be sold to a foreign-owned company. The top Management at Westinghouse did not do their job. They should have performed better and made the company what it should be -- U.S. owned. It is clear, that poor Management is the demise of Westinghouse today in the year 2006.

Anonymous said...

It is sad to see a company such as Westinghouse that had such great potential -- be sold to a foreign-owned company. The top Management at Westinghouse did not do their job. They should have performed better and made the company what it should be -- U.S. owned. It is clear, that poor Management is the demise of Westinghouse today in the year 2006.