GE (NYSE: GE) and Hitachi, Ltd. (NYSE: HIT; TSE: 6501) have signed a letter of intent to form a global alliance that will combine their nuclear power plant and services businesses.
GE, which launched Ecomagination to focus the world on its “green” product lines, sees nuclear power as a key to future growth, at odds with much of the “green commnunity.”
By combining their resources, the alliance will create a platform for growth and also signal the beginning of a new era for both companies as they position themselves to compete in what many in the nuclear industry are calling a “global renaissance for nuclear energy.” Hitachi will take a 40% stake in GE’s nuclear business and GE will take a 20% stake in Hitachi’s nuclear business. The parties anticipate that transaction will be completed in the first half of 2007.
The move will strengthen GE and Hitachi’s existing boiling water reactor capabilities in the light water reactor industry, while positioning the alliance for expansion into new nuclear energy segments and technologies.
“By taking this bold step together, GE and Hitachi are ensuring that both companies will be strongly positioned to compete effectively and grow in a sector worth billions of dollars,” GE Energy President and CEO John Krenicki said.
“This nuclear alliance further underscores GE’s commitment to the industry and to doing what is necessary to make us stronger for the next generation of nuclear energy,” said Andy White, president and CEO of GE’s nuclear business, which is based in Wilmington, N.C.
GE’s nuclear business, which is part of GE Energy, recently marked its 50th anniversary in the nuclear industry. It develops advanced light water reactors and provides a wide array of technology-based products and services to help owners of both boiling and pressurized water reactors safely operate their facilities with greater efficiency and output.
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