Toshiba Will Sell Westinghouse to Brookfield
Little more than a year after flagging multi-billion dollar writedowns that threatened its very survival, Toshiba has gained some closure with the sale of its former nuclear unit Westinghouse, according to Bloomberg.
Westinghouse was put into bankruptcy by Toshiba in March after project delays crippled earnings from the nuclear plant business. On Thursday, Brookfield Business Partners agreed to buy what remains of its U.S. business out of bankruptcy, as well as its non-bankrupt European business, for $4.6 billion.
Toshiba bought Westinghouse for $5.4 billion in 2006 as a way to diversify away from consumer electronics, but struggled to build new reactors and was wrong-footed by changes in the nuclear industry. That includes the impact of Japan’s 2011 Fukushima meltdown and a flood of cheap natural gas in the U.S. While it’s unclear what benefit the company will see from a sale, it will help Toshiba move on in the eyes of investors.
Since filing for bankruptcy in March, Westinghouse has said it will no longer take on the risk of building new atomic facilities, and will instead specialize in servicing reactors and selling designs. The deal includes Westinghouse’s business in Europe, the Middle East and Africa, which had remained outside of bankruptcy protection, while at the same time drawing on some of the financing that the bankrupt units obtained from Apollo Global Management.
Westinghouse had harbored hopes of up-ending the industry with the AP1000 reactor, which was developed to be safer than reactors of old. The design was supposed to revive an industry plagued by the accident at Three Mile Island in 1979. Instead, delays and overruns led to troubles that left Toshiba fighting for survival last year after writing down the value of the unit by billions.