Financial News

  • 16 January 2014, 13:05

Toshiba To Buy British Nuclear Power Firm

Toshiba is to take a controlling stake in a nuclear firm planning to build three power plants in Cumbria.

The Japanese company - best known for its electronics business - has agreed to buy 60% of†NuGeneration, which is owned by France's GDF Suez and Spain's Iberdrola.

The deal - expected to be completed within six months - is seen as an attempt by Toshiba to rekindle its atomic interests which were badly damaged in Japan as the country rowed back from nuclear power after the Fukushima crisis.

The purchase was worth about £102m but was "subject to adjustment", Toshiba said, in an announcement that sent its Tokyo-listed shares 4.5% higher in early afternoon trading.

Its statement said: "Toshiba, in collaboration with its group company Westinghouse Electric ...intends to move forward with the construction of three (pressurised water) nuclear reactors (in Moorside, England) in partnership with GDF Suez."

Toshiba boosted its interest in US-based Westinghouse last year as it eyes nuclear opportunities outside disaster-struck Japan.

Rival Hitachi said in 2012 it would buy British power firm Horizon to expand its business overseas.

Japan's nuclear stations have been shut down since 2011, when reactors at the Fukushima power plant were sent into meltdown after being hit by the devastating earthquake-born tsunami, causing the world's worst atomic accident in a generation.

It also decimated demand for new atomic plants in Japan.

Japan's pro-nuclear Prime Minister Shinzo Abe has been pushing a drive to sign atomic contracts abroad.

Last year, Japan and Turkey agreed a long-awaited deal to build a sprawling nuclear power plant on Turkey's Black Sea coast, marking the first order for Japan's atomic sector since the 2011 crisis.

The UK Government agreed last year a £16bn†deal with French energy firm EDF to build the Hinkley Point C nuclear plant in Somerset - the first new nuclear investment in the country for 20 years.

Britain has agreed to subsidise the project to build the two reactors, promising guaranteed power prices from the plant for 35 years, but the agreement is under threat from a European Commission investigation into whether the subsidised deal was the result of a genuine market failure.

:: Watch Sky News live on television, on Sky channel 501, Virgin Media channel 602, Freeview channel 82 and Freesat channel 202.