Toshiba, GE to Form Venture to Develop Thermal Power Equipment

Toshiba Corp. and General Electric Co. started talks on a joint venture to develop thermal power systems as they aim to boost profits from growing demand for electricity generation.

Toshiba, a Tokyo-based manufacturer of power generators, personal computers and televisions, and GE plan to each take a 50 percent stake in the venture and aim to seal their alliance by the end of the year, Toshiba spokesman Toru Ohara said by phone. The companies will focus on power systems that combine gas and steam turbines to more efficiently produce electricity.

Mitsubishi Heavy Industries Ltd. and Hitachi Ltd. agreed to merge their thermal power generation businesses in November. The planned venture between Toshiba and GE would also compete with Germany’s Siemens AG and France’s Alstom SA

“Our 30-year relationship with GE has been mainly focused on Japan in the past, and we are excited to work toward collaborating with GE in select projects around the world,” Norio Sasaki, Toshiba’s president and CEO, said in a statement.

Toshiba shares rose as much as 1.9 percent to 372 yen on the Tokyo Stock Exchange, heading for their highest level since March 28, 2012. The benchmark Nikkei 225 Stock Average fell 0.2 percent.

Toshiba and GE’s planned venture was reported by Japan’s Nikkei newspaper earlier today.

Before it's here, it's on the Bloomberg Terminal.