Posted on 08/22/2005 6:04:50 AM PDT by TigerLikesRooster
Monday August 22, 3:43 PM
S.Korea's Doosan Heavy may bid for Westinghouse
SEOUL, Aug 22 (Reuters) - South Korea's Doosan Heavy Industries said on Monday it was considering bidding in a consortium to buy U.S. nuclear power plant builder Westinghouse Electric Co. from British nuclear energy company BNFL.
South Korea's largest manufacturer of power generation equipment would be able to reduce costs and acquire nuclear technology and know-how from the U.S. firm if a bid was successful, analysts said.
Westinghouse provides nuclear fuel services, technology, plant design and equipment for nuclear power producers. State-owned BNFL bought the business, which employs about 9,000 people, from Swiss engineer ABB in 1999.
"We plan to form a consortium with other companies to bid for the company," Lee Soo-young, a vice president of Doosan Heavy Industries and Construction Co. Ltd. , said by telephone. Lee declined to name potential partners.
Doosan, also the world's leading builder of desalination facilities, would join a preliminary bidding process for Westinghouse due in the middle of September and a final bidding process would likely be held near the end of the year, he added.
Nuclear-related businesses occupied around 20 percent of Doosan's total operations, Doosan spokesman Jang Mun-jo said. A significant part came through ties with Westinghouse.
The U.S. firm constructed South Korea's first nuclear power plant in the 1970s and has been sharing its technology with Doosan for more than 20 years, Jang said.
Westinghouse also cooperated with Doosan to build a nuclear power plant in China this year, he added.
Jang declined to provide specific figures Doosan paid for those services or discuss the exact nature of the cooperation, noting the sensitivity of the information.
Kang Young-il, an analyst at Korea Investment and Securities, said Doosan would benefit from being part of an acquisition of Westinghouse.
"It would reduce their costs and it would acquire new technology," he said.
Doosan, whose total market capitalisation stands at $1.73 billion, would be unable to finance an acquisition on its own, he added.
"They don't have enough money," Kang said.
Japan's Mitsubishi Heavy Industries Ltd. said early last month it would offer to buy Westinghouse Electric, with the company's spokesman estimating the deal would be worth about $1.78 billion.
Washington is growing cautious about sales abroad of strategic energy-related companies, highlighted by the failed bid by CNOOC Ltd. of China for U.S. oil group Unocal Corp. , and some analysts predict this could prolong the bid process.
Shares in Doosan Heavy surged 6.51 percent to end at 18,000 won, outpacing the broad market's 2.46 percent rise. (Additional reporting by Kim Yoo-chul)
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Washington is growing cautious about sales abroad of strategic energy-related companies, highlighted by the failed bid by CNOOC Ltd. of China for U.S. oil group Unocal Corp. , and some analysts predict this could prolong the bid process.
Those two paragraphs don't quite cohere -- Westinghouse is already owned by a foreign firm: that horse is already well out of the barn.
Sell that puppy !
1. Westinghouse ... State-owned BNFL bought the business, which employs about 9,000 people, from Swiss engineer ABB in 1999.
No. BNFL purchased Westinghouse from CBS. CBS was a nightmare for Westinghouse and all employees have been pleased to work for BNFL. Under CBS, Westinghouse was tied down by heavy handed management by people who didn't know anything about the nuclear power plant business. Under BNFL, Westinghouse operated independently, but when they DID interact is was benficial to both, since BNFL is strictly a supplier of nuclear fuel, services and components. In 2001, Westinghouse purchased the nuclear arm of ABB (the former Combustion Engineering). The new Westinghouse had thrived over the past 5 years under BNFL. For a while it looked like BNFL (British Nuclear Fuel Limited) would become a privately owned company, but instead Parliment decided to keep BNFL as a state-run business, and felt that the United States operated Westinghouse (even though profitable) did not fit in with the BNFL charter.
2. Westinghouse also cooperated with Doosan to build a nuclear power plant in China this year
No. Westinghouse and DHI cooperated to BID on building SEVERAL plants in China.
3. In addition to DHI and Mitsubishi, interested parties include General Electric, several American groups and Framatome.
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