Toshiba Completes Westinghouse Acquisition

Heralds the Dawn of a New Era for Nuclear Energy



Oct 17, 2006, 01:00 ET from Westinghouse Electric Company

    TOKYO, Oct. 17 /PRNewswire/ -- Toshiba Corporation today announced its
 acquisition of BNFL USA Group Inc. and Westinghouse UK Limited
 (collectively Westinghouse), following completion of the final arrangements
 with British Nuclear Fuels Limited on October 16, US Eastern Standard Time.
 Westinghouse Electric Company is now a Toshiba Corporation consolidated
 group company.
     The integration of Westinghouse into Toshiba, along with its extensive
 expertise in nuclear power generation and nuclear fuel and worldwide market
 presence, is of great significance in terms of taking Toshiba Group's
 energy systems business to the global level. The powerful combination of
 Toshiba and Westinghouse's respective strengths, complementary technologies
 and businesses, will position Toshiba as the world's leading nuclear power
 group, with an unrivaled business range extending to both BWR*1 and PWR*2
 systems.
     Toshiba established two holding companies in the U.S. and the U.K.,
 Toshiba Nuclear Energy Holdings (US) Inc. and Toshiba Nuclear Energy
 Holdings (UK) Limited, to carry out the acquisition. Through these holding
 companies, Toshiba has invested US4,158 million dollars in acquiring a 77
 percent share of Westinghouse, giving Toshiba management control of the
 company. The remaining 23% is held by two strategic partner companies: the
 Shaw Group Inc. of the USA invested US1,080 million dollars in a 20% stake,
 while Japan's Ishikawajima-Harima Heavy Industries Co., Ltd. (IHI) invested
 US162 million dollars in a 3% stake. Toshiba discussed capital
 participation with potential partners in terms of mutual understanding of
 long-term business strategy, a shared market vision, and complementary
 relations and maximized synergies in conducting business. Toshiba continues
 discussions with several potential partners.
     Following the acquisition, Westinghouse will retain its operating
 autonomy and remain headquartered in Pennsylvania. By strengthening
 Westinghouse's operational structure to maximize synergy with Toshiba and
 its partners, Toshiba will seek to promote the expansion of Westinghouse's
 business.
     *1 BWR: Boiling Water Reactor, a reactor developed and commercialized
 by General Electric of the U.S.
     *2 PWR: Pressurized Water Reactor, a reactor developed and
 commercialized by Westinghouse of the U.S.
     Significance of the Acquisition
     There is renewed global interest in nuclear energy, driven by concerns
 to secure stable electric power supplies, promote conservation, and develop
 environmentally friendly energy technologies. Public awareness of the need
 for additional nuclear energy capacity is emerging in the United States and
 Europe, and in the fast-growing Asian economies. China and other growing
 economies have already planned new investments in plant construction. There
 are currently 439 nuclear power plants in operation worldwide, and demand
 for nuclear energy is expected to grow, as it complements the
 resource-saving and recycling-oriented society of the 21st century. From
 2002 to 2020, the global nuclear energy market is expected to grow
 130-gigawatt, equivalent to 130 1- gigawatt plants, the typical plant size
 anticipated in future.
     Toshiba is a leader in BWR technology, with a major presence in the
 Japanese market. Westinghouse enjoys a leading position in the world market
 with its PWR nuclear systems. The combination of Toshiba and Westinghouse
 will leverage capabilities in manufacturing, sales and marketing, and in
 engineering and R&D. The complementary partnership will go beyond the
 simple addition of the two businesses, and reinforce the ability to enter
 new business areas where the companies have found it difficult to operate
 individually in the past.
     By integrating Westinghouse's operations and promoting operational and
 technological synergies, Toshiba expects sales in its nuclear power
 business to expand to 700 billion yen by 2015 and 900 billion yen by 2020,
 compared with 200 billion yen today.
     Operational Structure after Acquisition
     Toshiba's policies on Westinghouse's operation are: 1. Toshiba has
 majority ownership; 2. maximize complementary synergy with partners; and 3.
 maintain and strengthen Westinghouse's ongoing operations. The operational
 structure will be as described below.
     1. By holding voting rights in proportion to its investment ratio
 through the holding companies in the U.S. and U.K., Toshiba has majority
 ownership of Westinghouse. Mr. Masao Niwano, a representative executive
 officer and corporate senior executive vice president and director of
 Toshiba Corporation has been appointed president of the board of both
 holding companies.
     2. The holding companies will have an "owner board" comprised of
 representative of the three partners. This organization will serve as an
 advisory body to the holding companies, with the role of coordinating views
 among the partners and making recommendations to the board of the holding
 company. Mr. Niwano will chair the owner board.
     3. Westinghouse Electric Company, the core of Westinghouse, will
 continue to operate from its headquarters in Pennsylvania. Mr. Steve Tritch
 will remain CEO of Westinghouse.
     4. The board of directors of Westinghouse Electric Company will have
 seven members, three from Westinghouse Electric Company, and four from
 Toshiba (two of whom will be part-time directors).
     5. In order to promote complementary relations and enhance synergetic
 collaboration, Toshiba will establish a coordination office in Westinghouse
 Electric Company. Personnel will be assigned from Toshiba and its partner
 companies, and the chief coordination officer (CCO) will be appointed by
 Toshiba.
     6. In Toshiba's Power Systems Company, the Nuclear Energy Systems &
 Services Division will continue to be responsible for promoting the BWR
 business. A WEC Coordination Division will be established to collaborate
 with the coordination office at Westinghouse Electric Company.
      Outline of Westinghouse Electric Company
      Established:           1886
      President and CEO:     Steve Tritch
      Sales:                 Approximately US$2 billion*1
      Employees:             About 9,000*1
      Head Office:           Monroeville, Pennsylvania, U.S.A.
     *1 Sales and employees at Westinghouse, including Westinghouse Electric
 Company
 
 

SOURCE Westinghouse Electric Company
    TOKYO, Oct. 17 /PRNewswire/ -- Toshiba Corporation today announced its
 acquisition of BNFL USA Group Inc. and Westinghouse UK Limited
 (collectively Westinghouse), following completion of the final arrangements
 with British Nuclear Fuels Limited on October 16, US Eastern Standard Time.
 Westinghouse Electric Company is now a Toshiba Corporation consolidated
 group company.
     The integration of Westinghouse into Toshiba, along with its extensive
 expertise in nuclear power generation and nuclear fuel and worldwide market
 presence, is of great significance in terms of taking Toshiba Group's
 energy systems business to the global level. The powerful combination of
 Toshiba and Westinghouse's respective strengths, complementary technologies
 and businesses, will position Toshiba as the world's leading nuclear power
 group, with an unrivaled business range extending to both BWR*1 and PWR*2
 systems.
     Toshiba established two holding companies in the U.S. and the U.K.,
 Toshiba Nuclear Energy Holdings (US) Inc. and Toshiba Nuclear Energy
 Holdings (UK) Limited, to carry out the acquisition. Through these holding
 companies, Toshiba has invested US4,158 million dollars in acquiring a 77
 percent share of Westinghouse, giving Toshiba management control of the
 company. The remaining 23% is held by two strategic partner companies: the
 Shaw Group Inc. of the USA invested US1,080 million dollars in a 20% stake,
 while Japan's Ishikawajima-Harima Heavy Industries Co., Ltd. (IHI) invested
 US162 million dollars in a 3% stake. Toshiba discussed capital
 participation with potential partners in terms of mutual understanding of
 long-term business strategy, a shared market vision, and complementary
 relations and maximized synergies in conducting business. Toshiba continues
 discussions with several potential partners.
     Following the acquisition, Westinghouse will retain its operating
 autonomy and remain headquartered in Pennsylvania. By strengthening
 Westinghouse's operational structure to maximize synergy with Toshiba and
 its partners, Toshiba will seek to promote the expansion of Westinghouse's
 business.
     *1 BWR: Boiling Water Reactor, a reactor developed and commercialized
 by General Electric of the U.S.
     *2 PWR: Pressurized Water Reactor, a reactor developed and
 commercialized by Westinghouse of the U.S.
     Significance of the Acquisition
     There is renewed global interest in nuclear energy, driven by concerns
 to secure stable electric power supplies, promote conservation, and develop
 environmentally friendly energy technologies. Public awareness of the need
 for additional nuclear energy capacity is emerging in the United States and
 Europe, and in the fast-growing Asian economies. China and other growing
 economies have already planned new investments in plant construction. There
 are currently 439 nuclear power plants in operation worldwide, and demand
 for nuclear energy is expected to grow, as it complements the
 resource-saving and recycling-oriented society of the 21st century. From
 2002 to 2020, the global nuclear energy market is expected to grow
 130-gigawatt, equivalent to 130 1- gigawatt plants, the typical plant size
 anticipated in future.
     Toshiba is a leader in BWR technology, with a major presence in the
 Japanese market. Westinghouse enjoys a leading position in the world market
 with its PWR nuclear systems. The combination of Toshiba and Westinghouse
 will leverage capabilities in manufacturing, sales and marketing, and in
 engineering and R&D. The complementary partnership will go beyond the
 simple addition of the two businesses, and reinforce the ability to enter
 new business areas where the companies have found it difficult to operate
 individually in the past.
     By integrating Westinghouse's operations and promoting operational and
 technological synergies, Toshiba expects sales in its nuclear power
 business to expand to 700 billion yen by 2015 and 900 billion yen by 2020,
 compared with 200 billion yen today.
     Operational Structure after Acquisition
     Toshiba's policies on Westinghouse's operation are: 1. Toshiba has
 majority ownership; 2. maximize complementary synergy with partners; and 3.
 maintain and strengthen Westinghouse's ongoing operations. The operational
 structure will be as described below.
     1. By holding voting rights in proportion to its investment ratio
 through the holding companies in the U.S. and U.K., Toshiba has majority
 ownership of Westinghouse. Mr. Masao Niwano, a representative executive
 officer and corporate senior executive vice president and director of
 Toshiba Corporation has been appointed president of the board of both
 holding companies.
     2. The holding companies will have an "owner board" comprised of
 representative of the three partners. This organization will serve as an
 advisory body to the holding companies, with the role of coordinating views
 among the partners and making recommendations to the board of the holding
 company. Mr. Niwano will chair the owner board.
     3. Westinghouse Electric Company, the core of Westinghouse, will
 continue to operate from its headquarters in Pennsylvania. Mr. Steve Tritch
 will remain CEO of Westinghouse.
     4. The board of directors of Westinghouse Electric Company will have
 seven members, three from Westinghouse Electric Company, and four from
 Toshiba (two of whom will be part-time directors).
     5. In order to promote complementary relations and enhance synergetic
 collaboration, Toshiba will establish a coordination office in Westinghouse
 Electric Company. Personnel will be assigned from Toshiba and its partner
 companies, and the chief coordination officer (CCO) will be appointed by
 Toshiba.
     6. In Toshiba's Power Systems Company, the Nuclear Energy Systems &
 Services Division will continue to be responsible for promoting the BWR
 business. A WEC Coordination Division will be established to collaborate
 with the coordination office at Westinghouse Electric Company.
      Outline of Westinghouse Electric Company
      Established:           1886
      President and CEO:     Steve Tritch
      Sales:                 Approximately US$2 billion*1
      Employees:             About 9,000*1
      Head Office:           Monroeville, Pennsylvania, U.S.A.
     *1 Sales and employees at Westinghouse, including Westinghouse Electric
 Company
 
 SOURCE Westinghouse Electric Company