NEWS SNAP: Toshiba Buys BNFL's Westinghouse For $5.4 Billion
February 6, 2006


By Alex MacDonald and Brooke Donovan
Of DOW JONES NEWSWIRES

LONDON -(Dow Jones)- Japan's Toshiba Corp. (6502.TO) Monday finalized the purchase of nuclear-technology company Westinghouse Electric Co. for $5.4 billion - nearly three times what Westinghouse's parent first hoped to fetch at auction.

Toshiba President and Chief Executive Atsutoshi Nishida said the company will buy 100% of Westinghouse and retain a 51% stake in the company, selling the remaining minority stake to potential partners including U.S. and Japanese companies.

The sale of Westinghouse is expected to close in about six months, pending regulatory approval from the U.S. anti-trust authority, the Committee on Foreign Investment. Nishida said he doesn't expect any problems.

"We have completed our due diligence and are satisfied that this purchase is the right move for our business and our shareholders," Nishida said. "With Westinghouse, Toshiba will be a global nuclear power business organization."

Mike Parker, chief executive of British Nuclear Fuels Ltd. (BNF.YY), which owned Westinghouse, said the deal "will provide Westinghouse with (the ability) to compete more effectively for new U.S. customers."

Upon completion of the acquisition, Toshiba expects its nuclear power business to expand to three times the current level by 2015 as a result of operational and technological synergies, Toshiba said in a statement.

The company said it decided to acquire Westinghouse "in order to take an early lead in the promising global nuclear power plant industry."

The deal comes amid expectations of growing demand for a new generation of nuclear-power facilities because of volatile natural-gas prices, as well as cost and environmental concerns over other power sources like coal.

Toshiba, which makes electronic goods including DVD players, semiconductors, electric motors and power systems, is preparing for an expected surge of new investment in power plants in China, India and the U.S.

Westinghouse - one of the world's leaders in nuclear technology - is likely to design the plants and service them when they come online.

Westinghouse, with a work force of 8,500, has built most of the nuclear reactors in the U.S. In the year ended March 31 2005, it had $1.78 billion in sales and $153 million in net earnings.

When British Nuclear Fuels put Westinghouse on the block last year, initial estimates were for a price approaching $2 billion. BNFL had paid about $1.2 billion for the unit in the late 1990s.

Andrew Moulder, an analyst at equity and credit research firm Credit Sights in London, said Westinghouse is a sensible acquisition for Toshiba, given rising global demand for emissions-free energy.

"It looks like nuclear build will go ahead, and (therefore) it makes sense to own nuclear manufacturing assets and nuclear expertise at the moment," Moulder said.

Another utility analyst said it is hard to determine the value of a nuclear business "because it's hard to project how much demand there might be for nuclear" power plants. He added that Toshiba's all-cash bid of $5.4 billion "might be a bargain, or it might not."

At 1320 GMT Toshiba was trading down 0.53% or 4 yen at JPY744 ($1=JPY118.976).

Company Web site: http://www.bnfl.com

http://www.toshiba.com


-By Alex MacDonald, Dow Jones Newswires; 44 20 7842 9328; alex.macdonald@dowjones.com

(END) Dow Jones Newswires

02-06-06 0839ET

Copyright (c) 2006 Dow Jones & Company, Inc.

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