Toshiba named preferred bidder in Westinghouse sale

By Control Engineering Staff January 31, 2006

Tokyo, JapanToshiba has confirmed that it has been selected by British Nuclear Fuels plc (BNFL) as the preferred bidder in the sale of Westinghouse Electric Co. The Japanese firm terms the move “an exciting opportunity that will enable the company to take advantage of a number of strategic opportunities in a sector which we believe has tremendous growth potential.”

Toshiba says it intends to retain Westinghouse’s U.S. identity and keep Pittsburgh the center of Westinghouse’s U.S. and European activities. Both Toshiba and BNFL cite benefits to the move. BNFL says it conducted a fair bidding process designed to ensure a level playing field and secure the best business result. The announcement comes after multiple rounds of bidding that began last fall. BNFL expects the sales contract to be signed in the near future and is recommending the bid for approval by the BNFL Group board.

However, the announcement prompted Standard & Poor ’s Ratings Services to place Toshiba’s “BBB” long-term and “A-2”short-term issuer credit and issue ratings on CreditWatch with negative implications, noting the investment burden of the acquisition could cause deterioration in the company’s balance sheet. Terms of the proposed contract were not disclosed. However, BNFL acknowledged Toshiba as the highest bidder. Media reports have speculated the acquisition will cost Toshiba about $5 billion.

—Control Engineering Daily News Desk
Jeanine Katzel, senior editor, jkatzel@reedbusiness.com