BROOKFIELD BUYS WESTINGHOUSE: $4.6 BLN
WNN - Brookfield Business Partners, together with institutional partners - collectively known as Brookfield - has agreed to acquire 100% of Westinghouse Electric Company from Toshiba Corporation for total of about $4.6 billion, the companies announced today.
Westinghouse, which filed with the US courts for Chapter 11 bankruptcy protection in March 2017 to enable it to undergo strategic restructuring, said the purchase price covers "substantially all" of Westinghouse's global business and its affiliated debtors and debtors-in-possession. The purchase price excludes cash: Brookfield expects to fund the purchase with about $1 billion of equity, $3 billion of long-term debt financing, and the balance by the assumption of certain pension, environmental and other operating obligations.
Brookfield highlighted Westinghouse's "strong market position" as the "largest service provider" to the world's nuclear facilities; its well-established global base of long-term customers; its "attractive" revenue and cash flow profile, with regularly scheduled services provided under long-term contracts; and its "strong reputation", driven by focus on innovation.
"Westinghouse is a high-quality business that has established itself as a leader in its field, with a long-term customer base and a reputation for innovation," Brookfield Business Partners CEO Cyrus Madon said. "We look forward to bringing our significant expertise and reputation as a long-term owner and operator of critical infrastructure in the US and globally, as well as our deep facilities management capabilities, to enhance the company's position as a leading global infrastructure services provider to the power generation industry."
Westinghouse president and CEO José Emeterio Gutiérrez said Brookfield's acquisition of Westinghouse reaffirmed the company's position as the "leader" of the global nuclear industry. "Our transformation and strategic restructuring process is creating a stronger, stable, and more streamlined global Westinghouse business, for the benefit of our customers and employees," he said.
The acquisition is expected to close in the third quarter of 2018, subject to bankruptcy court approval and other closing conditions including regulatory approvals. Throughout the process, Westinghouse will continue to operate in the ordinary course of business under its existing senior management, the company said.
Westinghouse's bankruptcy filing affected only its US operations, including projects to construct a total of four AP1000 reactors at two projects, Vogtle in Georgia, and VC Summer in South Carolina. Toshiba, who bought Westinghouse in 2006, has since then paid $3.68 billion in parental guarantees to the owners of the Vogtle project, and agreed to pay up to $2.168 to the owners of the Summer project. Construction has continued uninterrupted at Vogtle - co-owned by Georgia Power, Oglethorpe Power, MEAG Power and Dalton Utilities - following Westinghouse's bankruptcy, with Southern Nuclear taking over as project manager at the site and Bechtel managing construction. The owners of the Summer project - Scana subsidiary South Carolina Electric & Gas and Santee Cooper decided to cease construction of the South Carolina plant.
Brookfield Business Partners is a business services and industrials company listed on the New York and Toronto stock exchanges. It is a company of Toronto-headquartered Brookfield Asset Management, a global alternative asset manager with over $265 billion of assets under management, about $141 billion of which are in the USA.
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