Hitachi, Toshiba and GE are to combine their nuclear fuel businesses, Dow Jones reports, citing a press report from Japan. The merger could take place as soon as next April, the press report claims.
The three companies intend to set up joint ventures in both Japan and the USA and to transfer all aspects of their nuclear fuel businesses – development, production and marketing – to these two new ventures.
The aim is to cut costs. The dearth of new orders for nuclear power plants is restricting earnings for the three companies, which all build boiling water reactors.
Analysts have suggested that the merger could eventually lead to the consolidation of all the nuclear activities of the three companies. This supposition was reinforced by the president of Hitachi, who said that cooperation between the three nuclear businesses will deepen further.
The US joint venture is to be based around GE's Wilmington, North Carolina plant. The US company is to spin off the plant and transfer development and marketing staff to the new company. Hitachi and Toshiba will invest funds into the project.
The Japanese units will be set up around Japan Nuclear Fuel Co an existing nuclear fuel joint venture between the three companies. The move is seen as part of a restructuring taking place at Hitachi and Toshiba. Both companies have seen a recent fall in earnings. The Japanese venture will require the approval of the Fair Trade Commission because it will hold more than 40 per cent of the the domestic market for nuclear fuel.