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GE and Hitachi move closer to a nuclear marriage

Thursday, 17 May 2007

General Electric of the USA and Hitachi of Japan have signed a 'formation agreement' to proceed with merging their nuclear businesses. Described as a 'global alliance', the new nuclear playerwould have great expertise in boiling water reactors.

General Electric (GE) of the USA and Hitachi of Japan have signed a 'formation agreement' to proceed with merging their nuclear businesses.

Described as a 'global alliance', the combined nuclear player would have great expertise in boiling water reactor (BWR) design construction and maintenance. The companies said that potential areas for investment would include new infrastructure, advanced reactor design and service tehcnology.

The agreement is based on a letter of intent the two parties signed in November 2006. At that time it was announced that Hitachi would take a 40% stake in GE's nuclear business, while GE would take 20% of Hitachi's. The transaction is expected to be finalised in the second quarter of this year. Cross-shareholding companies would be created by the pair in Canada, Japan and the USA, subject to government approvals.

GE and Hitachi have a long history of cooperation, with Hitachi taking out a technology licensing agreement on GE's BWR designs in 1967.

The tie-in is part of a globalising trend among nuclear companies a the top level. Mitsibishi of Japan signed a memorandum of understanding with Areva of France in October 2006 to cooperate, particularly in the area of new reactor development. And in 2005, Japan's Toshiba bought US-based Westinghouse from the UK's state-owned BNFL.

Further information

General Electric Nuclear
Hitachi Nuclear Systems

Areva and Mitsubishi to collaborate