Toshiba Takes on Long-Delayed Nuclear Projects in CB&I DealMark Chediak and Lynn Doan
Toshiba Corp.’s Westinghouse Electric Company LLC agreed to buy CB&I Inc.’s nuclear business in a deal that would settle disputes between the two contractors and the owners of two long-delayed U.S. power projects.
Westinghouse Electric agreed to pay $229 million for the CB&I Stone & Webster Inc. unit upon the delivery of some equipment and the completion of the two U.S. projects, Southern Co.’s Vogtle nuclear power plant in Georgia and Scana Corp.’s V.C. Summer complex in South Carolina, terms posted on CB&I’s website Tuesday show.
The sale marks a shift for CB&I away from large-scale nuclear power projects and would resolve disputes that the company and Westinghouse had with Southern and Scana over who should pay for the cost overruns of their projects. CB&I projected an after-tax charge of about $1 billion to $1.2 billion from the deal. Westinghouse will take over the construction and startup of Vogtle and V.C. Summer, both delayed by years.
The deal will offer “a single focus of responsibility and accountability for the completion” of the nuclear units, CB&I President and Chief Executive Officer Philip K. Asherman said in a statement. “It provides clarity and increased predictability from our growing backlog of work in markets that are more strategic to our future growth.”
Westinghouse said in a company statement that the deal, expected to be completed by December, supports its expansion into the business of nuclear decontamination and enhances its management and environmental offerings. It’ll assume CB&I’s project operations and assets, including contracts in the U.S. and China.
Southern Co. said in a statement Tuesday that it had agreed to pay $350 million as part of a settlement related to the deal, “significantly less” than contractor claims in litigation over the Vogtle project. Scana and Santee Cooper reached their own settlement with the contractors that’ll raise Scana’s costs of the V.C. Summer project by about $286 million, a separate filing shows.
Scana also said in its filing that the completion dates for its two nuclear units at V.C. Summer may be delayed by another two months from a schedule approved by state regulators in September. Unit 2 is now projected to be finished by Aug. 31, 2019, and Unit 3 by Aug. 31, 2020, the company said.