The business services and industrials company Brookfield Business Partners has agreed to acquire nuclear services contractor Westinghouse Electric Company (WEC) from its Japanese parent company Toshiba Corporation for a total of US$4.6bn. The transaction is expected to close in the third quarter of 2018. The deal will be funded with US$1bn of stock, while US$3bn will be raised through debt financing; the remainder will consist in the assumption of some pension, environmental and other operating obligations.
Westinghouse, which was facing financial and construction challenges in its US AP1000 power plant projects (fixed-price construction contracts combined with major costs overruns), filed for Chapter 11 bankruptcy protection with the US courts in March 2017 in order to enable strategic restructuring. In October 2017, Toshiba bought back a 10% share in WEC from the minority shareholder Kazatomprom for Yen59bn (about US$522m). Westinghouse's bankruptcy led to tremendous losses for Toshiba and questions the fate of nuclear projects in the United States.
Brookfield Business Partners is an affiliate of the Canadian firm Brookfield Asset Management which manages around US$265bn of which US$150bn in real estate assets.
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