Toshiba Corporation
(
TOSYY
) is reportedly planning to sell up to 36% stake in Nuclear power
unit Westinghouse.
Chicago
Bridge
& Iron
(
CBI
) has emerged as the prospective buyer. The decision to sell its
stake by Toshiba (which currently owns a 67% stake in the
Westinghouse Electric atomic-power unit) is in the wake of the
slowdown in the nuclear industry since the Fukushima shutdown
last year. Toshiba intends to reduce its exposure to the nuclear
industry as many of the power plants in Japan have been
closed.
Currently, Toshiba has received six offers for the announced
divestiture, three of which are for a 16% stake and the other
three are for 20% in the said company. However, Toshiba intends
to retain a majority stake in the nuclear unit, for which now
Toshiba intends to acquire another 20% stake from the Shaw group
for approximately ¥125 billion ($1.5 billion). Following the
buyout, Toshiba's stake in the power unit increases to 87%.
The Shaw Group primarily serves sectors like energy,
chemicals, power, environmental, infrastructure and emergency
response industries.
The prospective bidder for Toshiba's nuclear unit, Chicago
Bridge & Iron, is also set to acquire The Shaw Group for $3
billion, primarily to expand its nuclear business. Therefore, if
the company succeeds in acquiring the 20% stake of the nuclear
unit, it will further enhance the company's portfolio in the
nuclear business. The Shaw group and Chicago Bridge & Iron
were one of the first companies in the group that had built
nuclear reactors in the U.S.
Chicago Bridge & Iron Company N.V. provides conceptual
design, technology, engineering, procurement, fabrication,
construction, and commissioning services to energy and natural
resource industries worldwide. The company currently has a Zacks
#2 Rank, implying a short-term (1-3 months) Buy rating on the
stock.
Toshiba is a leading manufacturer of consumer electronics and
home appliances globally. The company is also the principal
manufacturer of NAND flash memory following South Korea based
Samsung Electronics.
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