Hitachi Buys U.K. Nuclear Power Venture for $1.1 Billion
The Japanese manufacturer Hitachi Ltd. Has agreed to buy Horizon Nuclear Power from Germany’s two largest utilities for £696 million ($1.1 billion), ensuring support for the U.K. government’s energy program.
The transaction will be completed next month and secure financial backing for as many as six new nuclear reactors at two sites in Britain, according to a statement from Hitachi and the utilities, RWE AG (RWE) and EON AG. (EOAN) The German companies are withdrawing as the nation closes its own nuclear plants.
The deal helps Hitachi’s goal to more than double nuclear sales to 360 billion yen ($4.5 billion) by 2021 and underpins U.K. Prime Minister David Cameron’s decision remain one of three western European nations expanding atomic power. Horizon is part of Britain’s 110 billion-pound program to replace aging power plants, upgrade grids and cut pollution.
Hitachi’s plan to install their Advanced Boiling Water Reactor, which it makes with General Electric Co., has been licensed in the U.S., Taiwan and Japan. While it is yet to seek U.K. approval through a process known as Generic Design Assessment, the reactor equipment already operates in Japan. Hitachi’s Ishizuka said today he expected the GDA approval process to take three to four years
U.K. companies Babcock International Group Plc and Rolls- Royce Holdings Plc and Canada’s SNC-Lavalin Group Inc. have agreed to join Hitachi to “plan and deliver” the construction project, the Japanese company said.
“Today starts our 100 year commitment to the U.K. and its vision to achieve a long-term, secure, low-carbon, and affordable energy supply,” Hitachi President Hiroaki Nakanishi said in a statement.
Hitachi plans to build two to three nuclear plants with capacity of about 1,300 MW each at Wylfa, Anglesey, and Oldbury, Gloucestershire, it said. The company plans to start operation of one of the units in the first half of the 2020s.
Masaharu Hanyu, Hitachi’s vice president, indicated the company may seek other partners in the venture as it would be difficult to raise the “massive construction costs” alone. Mizuho Financial Group Inc. and Evercore Partners Inc. have been hired as financial advisers for the projects, Hanyu told reporters in Tokyo today.