Nuclear Reactors 265 - Toshiba Considering Sale Of Westinghouse Nuclear Subsidiary
Toshiba, the giant Japanese conglomerate, has been having serious financial problems for the past few years. There was an accounting crisis where Toshiba misreported some of their financial information and was drawn into court in a huge scandal. Toshiba also owns Westinghouse which builds nuclear power plants. Two AP1000 reactors that Westinghouse is building in the U.S. are behind schedule and over budget. There are nuclear infrastructure projects in the United Kingdom which are in serious trouble if Toshiba pulls out of the reactor construction business. There is a lot of talk in the nuclear industry that Toshiba is seriously considering selling its Westinghouse nuclear subsidiary.
Westinghouse would bring a buyer a horde of nuclear technology, intellectual property, and expertise. There are Westinghouse components in half of the power reactors in the world. If Westinghouse is sold, it would likely be restructured in order to free the company from obligations relating to current construction projects that are in financial trouble. Toshiba has not made a final decision on the sale of Westinghouse but has said that it will consider selling the nuclear subsidiary if it can find a buyer "committed to maintaining and developing the business in a way acceptable to its customers and governments where it operates."
The Westinghouse AP1000 nuclear power reactor is a popular choice for new nuclear projects in the international market for nuclear infrastructure. The AP1000 is considered to be what is referred to as a Generation III+ reactor. It is advertised as being cheaper and easier to install and operate with enhanced safety features when compared to older power reactor designs.
China currently has thirty-six operational power reactors, is building twenty-one more and has still more being planned. By the next decade, China may have the biggest reactor fleet in the world. China wants to sell and build nuclear power reactors across the world and is aggressively pursuing that market. Westinghouse is constructing two AP1000 reactors for the Chinese but they are behind schedule and over budget. China has established a supply chain to construct Westinghouse AP1000 reactors. China is being discussed as a possible buyer of Westinghouse if it comes up for sale. If they purchased Westinghouse, it would help raise their credibility as a reliable source for nuclear power reactors. One problem that might be encountered in such a sale would be national security concerns of the U.S. and Japan.
South Korea is also interested in becoming a global supplier of nuclear power reactors. They have actually constructed and exported Generation III+ reactors. Kepco, the South Korean conglomerate is interested in possibly acquiring Westinghouse because they are moving into the international trade in power reactors. Kepco is not actively trying to buy Westinghouse but would consider purchase if Toshiba offers a good deal.
Japanese nuclear companies including Mitsubishi Heavy Industries Ltd., Hitachi and Toshiba have discussed combining their fuel supply units following the long-term loss of business caused by the Fukushima disaster and the shutdown of all Japanese power reactors. The three companies might consider combining their nuclear divisions in order to hold onto expertise and market share for trade in nuclear technology. On the other hand, they have different technologies and reactor designs which would make it difficult to integrate their nuclear divisions. All three have denied any current plans to combine their nuclear businesses.
