Toshiba to Acquire Nuclear Plant Maker Westinghouse

Toshiba Corp. has agreed to buy Westinghouse, the U.S. power plant arm of British Nuclear Fuels, for $5.4 billion to bolster its position in the world’s resurgent nuclear power industry.

Japan’s second-biggest electronics maker said Monday that it expected several minority investors to join the deal but that it would retain a controlling stake.

The Japanese company expects its nuclear power business to triple in size by 2015 and expects to recoup its investment in Westinghouse in 15 to 20 years, it said.

Westinghouse builds and runs nuclear power plants worldwide and is a leader in the Chinese nuclear power market.

Nuclear power fell out of favor after the Chernobyl disaster in 1986 and has been dogged by concerns about the financial and environmental costs of the disposal of radioactive waste. But it has recently returned to the fore.

Concern over the security of power supplies and growing demand worldwide for energy have fueled a surge in crude oil prices, prompting fuel-hungry countries such as China to expand investment in other energy sources including nuclear power.

The Chinese government’s plan to increase nuclear power capacity to 36,000 megawatts by 2020 will require an estimated 27 new 1,000-megawatt reactors costing about $2 billion each.

More than $200 billion will be spent on nuclear power worldwide by 2030, according to the Paris-based International Energy Agency, an advisor to 26 major energy-consuming countries.

President Bush has said he wants to expedite the licensing of new reactors in the U.S.

“We’ve seen a shift in the global environment. There’s more support for the nuclear solution,” said Masao Niwano, the head of Toshiba’s atomic unit. “Nuclear power will be one of the solutions to meet increasing demand.”

Toshiba was selected last month as the preferred bidder after multiple rounds over the last several months. An initial 14 interested bidders narrowed to Toshiba, General Electric Co. of the U.S. and Japan’s Mitsubishi Heavy Industries Ltd.

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Bloomberg News and Reuters were used in compiling this report.