Japanese electronics maker Toshiba has confirmed the news of acquiring U.S. power plant company Westinghouse for $5.4 billion, far beyond what the company was expecting to gather through a sale of its assets.
Toshiba will be retaining a chunky 51 percent stake of Westinghouse; however several minority investors are expected to come forward before the transaction completes by the middle of 2006.
Although it may seem as Toshiba may have nothing to gain from such a deal, amongst the corporation’s wide range of products, items such as boiling water reactors also exist. Westinghouse produces the more commonly used pressurised water reactors, used by 60 percent of the industry. But the market has looked at the transaction critically: some say the company may damage itself financially by spreading its resources too thin. The stock fell a half percent following the news on the Tokyo Stock Exchange.