Hitachi agreed to buy the UK venture Horizon Nuclear Power from EON AG and RWE AG, Germany’s two largest utilities, for 696 million pounds ($1.1 billion) in another step to shift its business focus away from electronics.
The announcement was made in statements by Hitachi, EON and RWE today, which added the transaction will be completed next month. Hitachi will hold a press conference at 4:30 pm local time in Tokyo.
The UK, one of only three western European nations with plans to build atomic reactors, has budgeted 110 billion pounds to replace aging power plants, upgrade grids and cut pollution. The deal will help Hitachi with its plan to more than double nuclear sales to 360 billion yen by the end of March 2021.
“Hitachi President Hiroaki Nakanishi is targeting overseas markets as nuclear business prospects have dimmed at home” after Japan adopted a policy to phase out atomic power,Yoshiharu Izumi, an analyst at JPMorgan Chase & Co in Tokyo, said by phone before the announcement.
EON and RWE decided to sell Horizon after Germany said it will close all of its reactors after last year’s nuclear disaster in Japan, prompting the utilities to pull back from the atomic industry worldwide. Hitachi, meantime, sold its profitable hard-disk drive unit to Western Digital Corp. in March and earlier sold a stake in Elpida Memory Inc. as it expanded into infrastructure and power businesses.
An earthquake and tsunami in March 2011 caused triple meltdowns at Tokyo Electric Power Co.’s Fukushima Dai-Ichi nuclear station, causing mass evacuations and leaving some areas uninhabitable for decades. On September 14 this year, Japan Prime Minister Yoshihiko Nodaapproved a policy to stop building atomic plants and to phase out nuclear power by 2040.
In contrast, UK industry has set out plans to build 16 gigawatts of nuclear power by 2025 and the government has designated eight sites for plants. Those goals appeared at risk when Areva SA and China Guangdong Nuclear Power Group pulled out of the bidding for Horizon this month. That left Electricite de France SA, Iberdrola SA and GDF Suez SA as the only developers advancing UK nuclear projects.
Hitachi’s Advanced Boiling Water Reactor, which it makes with General Electric, has been licensed in the US, Taiwan and Japan. While it is yet to seek UK approval through a process known as Generic Design Assessment, the reactor equipment already operates in Japan.
