High-tech firm Hitachi (IW1000/22) said Tuesday it will buy British atomic power venture Horizon to expand its nuclear business overseas as post-Fukushima Japan remains wary over the technology.
The company said it had agreed with Horizon Nuclear Power's 50-50 German owners E.ON and RWE to buy all Horizon shares from them in November.
RWE said the purchase price was $1.12 billion.
News of the deal, which had been reported over the weekend, came as Hitachi said its group net profit in the six months to September tumbled 40.9% from a year earlier to 30 billion yen (US$376 million).
Hitachi is reportedly seeking to expand its nuclear power business overseas after the Fukushima nuclear accident last year effectively wiped out demand for new reactors in Japan.
Horizon plans to build two or three 1,300-megawatt-class reactors each at two nuclear power stations in Britain, and Hitachi will take over the task, the company said. The first reactor is expected to come online in the first half of the next decade.
The German utilities launched Horizon in 2009 but decided last March to sell the unit following the German government's decision to phase out nuclear power after the Fukushima disaster, when a tsunami swamped the plant's cooling systems and sent reactors into meltdown.
To promote the project in Britain, Hitachi said it had signed memorandums on cooperation with British nuclear firm Babcock International, Rolls-Royce and Canadian engineering firm SNC Lavalin.
Advanced boiling water reactors will be installed at the plants on the island of Anglesey in Wales, and in Oldbury, Gloucestershire, Hitachi said, adding that about 1,000 workers are expected to be employed at each site.
Hitachi's nuclear power systems chief executive Masaharu Hanyu told Japanese media that his company may sell Horizon shares to investors in the future.
"As it is deemed difficult for Hitachi alone to prepare funds for constructing the power stations, we want to solicit investors," he said, according to Nikkei newspaper.
"It will depend on whether Hitachi can develop it into an attractive company."
In its half-year earnings report, Hitachi said its operating profit dropped 4.1% to 164 billion yen in a fallback reflecting a gain from its sell-off of a hard disk drive division a year earlier.
A profit decline in the group's construction machinery business due to China's economic slowdown and its exposure to shares in Japan's troubled Renesas Electronics also contributed to the setback, the statement said.
Hitachi's consolidated revenue fell 4.7% to 4.36 trillion yen. Sales of automotive systems jumped due to growing global demand for cars.
For the full year to March 2013, the company forecast a 42.4% drop in its net profit to 200 billion yen as earlier expected.
"The economic environment surrounding Hitachi is increasingly uncertain amid the prolonging sovereign debt crisis in Europe which is slowing down growth in China, India, Brazil and other emerging economies," the statement said.
-Shigemi Sato, APF
Copyright Agence France-Presse, 2012
