From: Yuri Kageyama, Associated Press
Published February 9, 2006 12:00 AM

Toshiba Says Westinghouse Purchase Will Let it Tap into Growing Nuclear Market

TOKYO — Toshiba Corp. is confident the purchase of U.S. nuclear power company Westinghouse Electric Co. will pay off, and the Japanese electronics maker is in talks with several possible minority-stake partners, the president said Wednesday.


Toshiba announced Monday it will purchase Westinghouse for $5.4 billion from British Nuclear Fuels PLC.


President Atsutoshi Nishida said Toshiba will retain at least a 51 percent stake, and talks are going well with five or six companies seeking to hold the remaining share.


He declined to give details or identify the companies, although he ruled out General Electric Co., the U.S. industrial products, financial services and media conglomerate.


"There is no talk at this point of GE taking a stake," Nishida told reporters and analysts at a Tokyo hotel.


General Electric was one of the bidders for Pennsylvania-based Westinghouse, as was Japanese machinery maker Mitsubishi Heavy Industries Co.


General Electric and Toshiba have been working together in developing technology since 2001, and Nishida said Toshiba wants that relationship to continue.


Toshiba is banking on the gradual shift in nuclear power policy in the United States and other nations amid rising oil prices and concerns about a stable energy supply, pollution and global warming.


Growing economies such as China and India are planning to build nuclear power plants, and energy demand is expected to grow worldwide by the equivalent of 130 nuclear plants by 2020, Nishida said.


"The purchase is an opportunity to expand our business globally," Nishida said, adding that Toshiba and Westinghouse together will control top market share in the nuclear power business at about 28 percent.


The market has been less confident about the move. Toshiba shares have dropped this week, and ratings agencies are reviewing Toshiba for a possible downgrade. Toshiba shares slid 3 percent to close at 716 yen ($6) in Tokyo on Wednesday.


Source: Associated Press


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