By Kennedy Maize
Washington, D.C., February 23, 2013 — Will Chicago Bridge & Iron Co. buy nuclear reactor vendor Westinghouse Electric Co.? That rumor was flying at the Platts nuclear conference in Washington this week. There is a certain, slightly perverse logic to such a deal.
CB&I closed its $3 billion acquisition of Shaw Group just the week before, putting it deeply into the nuclear business. Toshiba announced late last year that it is looking for a buyer for a major portion of Pittsburgh-based Westinghouse. Toshiba said it wants to unload up to 36% of Westinghouse, but retain majority control. Toshiba currently owns 87% of Westinghouse.
At the time of Toshiba’s announcement, the Japanese company surfaced CB&I’s name as a possible buyer. Since then, those rumors have persisted.
Toshiba’s search for an investor came after it was forced to eat the 20% of Westinghouse that Shaw owned and had an option to sell back to the Japanese conglomerate. Shaw exercised the option as prospects for nuclear in Japan were turning sour.
Asked the question directly at the Platt’s meeting, CB&I’s Tom Nauman, who came to the company with Shaw, acknowledged that Toshiba had contacted CB&I about the deal. “No decisions have been made,” he said.
Why would CB&I want Westinghouse, particularly after Shaw bailed out of a major piece of the reactor vendor? I asked several of the nuclear veterans at the Platts meeting just that question. The best answer I got was from someone who, naturally, did not want to be on the record, but who has worked in the business since the early 1970s. His answer: China. Westinghouse, and it’s advanced AP1000 reactor, have a strong presence in the booming market, a market where CB&I certainly would like to make a big splash.
But a CB&I purchase of Westinghouse would not bring the ownership of the venerable and historic U.S. electricity company back to the U.S. Despite the name, Chicago Bridge & Iron is headquartered in The Hague.