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Toshiba Buys Shaw's Stake In Westinghouse; Says Open To Stake Sale Talks

1/7/2013 4:02 AM ET

Japanese electronics giant Toshiba Corp. (TOSBF.PK) on Monday said it has acquired engineering company Shaw Group Inc.'s (SHAW: Quote) 20 percent stake in Westinghouse Electric Co. on January 4 for about 125 billion yen. The company added that it is open to talks as it has received expressions of interest from potential partners regarding acquisitions of holdings in Westinghouse.

The talks would be on the condition that Toshiba retains a majority stake, can expect to share long term business prospects and strategies with such partners, secure positive synergies, and obtain an appropriate evaluation of Westinghouse's corporate value, it said.

Media had reported in late December that Toshiba was in talks to sell as much as 16 percent stake in its Westinghouse atomic-power unit as industry growth slows.

In October also, Toshiba had said that it received interest from potential partners and was open to talks on condition that it will retain a majority stake in Westinghouse.

Shaw's shares in Westinghouse were held by its special purpose unit Nuclear Energy Holding. Toshiba said the acquisition is in line with the put option exercised by Shaw on October 6, under the deal between both companies at the time of Shaw's participation in Toshiba's acquisition of Westinghouse.

It was in 2006 that Toshiba paid $4.16 billion for 77 percent of the nuclear- power services provider. The company was having 67 percent after it sold 10 percent stake to Kazakhstan's Kazatomprom in 2007.

Following the latest acquisition, which was made in immediately available cash and loans, Toshiba's share in Westinghouse has increased to 87 percent.

Westinghouse is currently constructing four AP1000 nuclear reactors in the U.S. and a further four in China. The company aims to grow its business by expanding its global sales volume.

As per reports, the planned sale would allow the firm to offload shares and would reduce Toshiba's exposure to the nuclear industry following Japan's power-plant shutdowns and global growth in alternative energies.

Regarding the planned stake sale, the company said it expects the participation of third-party partners to contribute to the reinforcement of Westinghouse's business and the reinforcement of Toshiba's financial position.

Toshiba added that at this time, it does not plan to revise projections for fiscal 2012 business to reflect this acquisition.

In Tokyo, Toshiba shares dropped 7 yen or 2 percent on Monday to close at 343 yen.

Shaw closed Friday's regular trading session at $46.71, up $0.01 or 0.02 percent.

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by RTT Staff Writer

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