Toshiba to buy Shaw Group's Westinghouse stake for $1.6 bn

Toshiba Corp, Japan's largest maker of nuclear reactors has agreed to buy engineering and construction company Shaw Group's 20-per cent stake in nuclear power-plant company Westinghouse Electric Co, for about $1.6 billion.

The purchase will increase Toshiba's stake in Westinghouse from 67 per cent to 87 per cent.

Tokyo-based Toshiba, Shaw Group and Japan's Ishikawajima-Harima Heavy Industries had acquired a majority stake in Westinghouse in 2006 from British Nuclear Fuels Plc for $5.4 billion. (See: Toshiba buys Westinghouse for $5.4 billion).

Toshiba paid $4.16 billion for a 77 per cent stake, while Shaw Group paid $1.08 billion for 20 per cent stake and Ishikawajima paid $16 million for the remaining 3 per cent. Toshiba sold 10 per cent of its stake to Kazatomprom, Kazakhstan's state nuclear company in 2007.

As part of the acquisition, Shaw had the option to sell all or part of its 20-per cent stake to Toshiba before the six-and-a-half-year maturity of the bonds.

Shaw Group said that it decided to exercise its option of selling its stake due to the recent significant appreciation of the Japanese yen against the US dollar, which made the group incur foreign exchange loss on the bonds. Under the circumstances, Shaw Group said that it has decided to exercise the put option.