RE: Westinghouse & Uranium (DONE DEAL)LONDON, Feb. 6 — Making a big bet on the future of nuclear power, Toshiba of Japan agreed on Monday to buy Westinghouse Electric, the atomic energy division of British Nuclear Fuels, for $5.4 billion.
The purchase price is about three times the amount analysts estimated in July, because of competition for the unit. Toshiba outbid global giants like Mitsubishi Heavy Industries and General Electric.
Nuclear power is increasingly seen as an alternative to energy sources like coal and oil, as energy demand increases around the world. Atsutoshi Nishida, Toshiba's president and chief executive, speaking at a news conference in London, estimated that demand for nuclear power would grow 50 percent by 2020.
"Everywhere you look today you see a rekindling of interest in nuclear power," he said, as countries try to combat global warming and diversify their energy sources. The deal on Monday, he said, represented an "important step for the globalization of the nuclear power business."
Westinghouse, based in Pittsburgh, has 8,500 employees worldwide and a pretax profit of £18 million ($31.5 million) last year. The company produces pressurized-water nuclear reactors, the most commonly used type, and the fuel for them, and does maintenance and repairs. Westinghouse estimates that half of the world's nuclear plants and 60 percent of those in the United States use its technology.
In a sign of the new demand for nuclear power, China alone plans to build more than 25 nuclear power plants by 2020, and the government is said to prefer the pressurized-water reactors that Westinghouse manufactures. Toshiba is already a leading manufacturer of another commonly used type of reactor, which uses boiling water.
Toshiba said that it would acquire all of Westinghouse but that it was in discussions to sell minority stakes to other companies, which it did not identify. Toshiba estimates its nuclear business will triple by 2015 because of the deal. The company said it would pay for the purchase over three years, using available cash flow.
British Nuclear Fuels, which is owned by the British government, bought Westinghouse in 1999 for $1.1 billion. Lately, British Nuclear has been selling off power-generating assets to concentrate on its nuclear decommissioning and cleanup work in Britain.
Britain, the first country to use nuclear energy, is in the process of dismantling plants built in the 1970's whose useful life has ended.
Nonetheless, interest in nuclear power is resurgent. "We got a lot of inquiries from many companies," Mike Parker, chief of British Nuclear Fuels, said at the news conference. "The tide for nuclear has really been rising."