Toshiba in Talks to Sell Up to 16% of Westinghouse Electric

Toshiba Corp. (6502), the Japanese manufacturer of nuclear reactors, consumer electronics and home appliances, is in talks to sell a stake in its Westinghouse Electric atomic-power unit as industry growth slows.

The company is in discussions with three parties on a possible sale of as much as 16 percent in the business, Toru Ohara, a spokesman for Tokyo-based Toshiba, said today by telephone, confirming comments by President Norio Sasaki reported earlier by MarketWatch.

The company said in October it had interest from potential partners and was open to talks as long as it retained majority control. A sale would allow it to offload shares after being forced to buy 20 percent of Westinghouse when Shaw Group Inc. (SHAW) exercised an option to sell its stock. It would reduce Toshiba’s exposure to the nuclear industry following Japan’s power-plant shutdowns and global growth in alternative energies.

“The situation surrounding nuclear power has changed since the time Toshiba bought Westinghouse, with an increased production in shale gas in the U.S. and an impact from Fukushima in Japan,” said Yuichi Ishida, an analyst at Mizuho Investors Securities Co. “Toshiba bought shares in Westinghouse at a price that was a bit high, so it will take some time for the company” to sell the stock.

Photographer: Kiyoshi Ota/Bloomberg

Toshiba paid $4.16 billion for 77 percent of Westinghouse in 2006. Close

Toshiba paid $4.16 billion for 77 percent of Westinghouse in 2006.

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Photographer: Kiyoshi Ota/Bloomberg

Toshiba paid $4.16 billion for 77 percent of Westinghouse in 2006.

Toshiba Shareholding

Toshiba paid $4.16 billion for 77 percent of the nuclear- power services provider in 2006. It nows owns 67 percent after Kazakhstan’s Kazatomprom purchased 10 percent in 2007.

Toshiba is set to acquire 20 percent of Westinghouse from Baton Rouge, Louisiana-based Shaw Group next month for 125 billion yen ($1.5 billion), bringing its total holding to 87 percent.

“It has been Toshiba’s idea to keep a 51 percent share and let others hold the rest,” Hideki Yasuda, an analyst at Ace Securities Co., said today by phone. “It is good if the company can bring that to reality.”

Toshiba rose 3.2 percent to 321 yen at the close of trading in Tokyo, while Japan’s benchmark Nikkei 225 Stock Average gained 0.9 percent. The stock has advanced 1.9 percent this year.

To contact the reporters on this story: Yoshinori Eki in Tokyo at yeki@bloomberg.net; Chisaki Watanabe in Tokyo at cwatanabe5@bloomberg.net

To contact the editor responsible for this story: Michael Tighe at mtighe4@bloomberg.net

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