Hitachi Enters Nuclear Energy Projects in U.K. with Buyout

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Researched by Industrial Info Resources (Sugar Land, Texas)--Japanese company Hitachi (Tokyo, Japan) announced plans to buy British nuclear venture firm Horizon from the German utilities RWE AG (OTC:RWEOY) (Essen, Germany) and E.ON AG (PINK:EONGY) (Dusseldorf, Germany).

The company, which aims to divert its businesses from consumer electronics to infrastructure, will pay $1.12 billion in cash and shares to buy Horizon. Hitachi aims to multiply its revenues from its nuclear power businesses in the coming decade. The acquisition will help Hitachi bolster its nuclear power business, which has lost momentum since the Fukushima Daiichi disaster in March 2011, and globalize its operations by finding new growth opportunities in the United Kingdom (U.K.)

According to a statement, the company will use advanced boiling water reactor technology in proposed new U.K. plants. The company said its plans for Horizon involve building up to three 1,300-megawatt power plants, one at each of Horizon's sites at Wlyfa, Anglesey and Oldbury, Gloucestershire. The company said that the first unit is scheduled to become operational in the first half of 2020.

Up to 6,000 jobs are expected to be created during construction at each site, with a further 1,000 permanent jobs at both locations when operational. With these plants, the company is expected to generate power equivalent of up to 14 million homes over 60 years.

"Today starts our 100-year commitment to the U.K. and its vision to achieve a long-term, secure, low-carbon and affordable energy supply," Hitachi President Hiroaki Nakanishi said.

In early March, German utility firms RWE and E.ON said they were scrapping plans to develop new nuclear projects in the U.K., and put their Horizon joint venture up for sale. The two compaines set up the joint venture in 2009 with the aim to build new nuclear plants in the U.K.

The U.K. Nuclear Industry Association welcomed the deal, which it said would boost the prospects for a new generation of advanced boiling water reactors. The government is in favor of new nuclear plants being built and plans a carbon floor price and contracts that ensure nuclear and renewable energy get favorable prices.

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