BNFL poised to buy nuclear division of ABB
Your support helps us to tell the story
From reproductive rights to climate change to Big Tech, The Independent is on the ground when the story is developing. Whether it's investigating the financials of Elon Musk's pro-Trump PAC or producing our latest documentary, 'The A Word', which shines a light on the American women fighting for reproductive rights, we know how important it is to parse out the facts from the messaging.
At such a critical moment in US history, we need reporters on the ground. Your donation allows us to keep sending journalists to speak to both sides of the story.
The Independent is trusted by Americans across the entire political spectrum. And unlike many other quality news outlets, we choose not to lock Americans out of our reporting and analysis with paywalls. We believe quality journalism should be available to everyone, paid for by those who can afford it.
Your support makes all the difference.BRITISH NUCLEAR FUELS, the state-owned reprocessing company, is poised to buy the nuclear division of ABB, the Swedish-Swiss engineering giant, in one of several deals which are set to transform the industry.
The move comes as the state-owned French nuclear power station supplier, Framatome, is on the brink of acquiring the nuclear services division of Siemens of Germany.
The acquisition of ABB's nuclear arm would strengthen BNFL's position as the world's leading nuclear reprocessing and fuel services company ahead of its pounds 1.5bn stock market flotation.
BNFL bought the nuclear business of Westinghouse of the United States last year for $1.2bn and has been on the lookout for further deals since to consolidate its nuclear-fuel manufacturing business.
John Taylor, the chief executive of BNFL, is understood to have visited ABB's headquarters in Zurich 10 days ago to discuss the deal and sign an exclusive negotiating agreement. The deal is codenamed Diamond.
Framatome had also been interested in buying the ABB business with the result that BNFL has been forced to raise its price.
The precise value of the deal is not known, but ABB's nuclear business has sales of around $400m a year.
The takeover will be structured in such as way that BNFL buys ABB's operations in Europe while Westinghouse buys its activities in the United States where ABB has a nuclear fuel fabrication facility in Connecticut.
The deal could yet face anti-trust objections in the United States, where it will lead to a reduction in competition in nuclear-fuel manufacturing and clean-up.
The expected Framatome-Siemens deal will lead to a further consolidation of the industry.
Following the Westinghouse acquisition, a third of BNFL's pounds 2bn-a-year turnover comes from the manufacture of fuel and the servicing of nuclear reactors around the world. The purchase of ABB's nuclear division would raise this to nearer a half.
BNFL's strategy is to diversify away from recyclingspent nuclear fuel at its Sellafield plant in Cumbria and to build a bigger international presence.
One of the government-imposed targets BNFL has to meet in order for the partial privatisation to proceed is to increase profits from its US business to 15 per cent of the group's total.
Last year BNFL made a pre-tax profit of pounds 228m - a 42 per cent increase on the pounds 160m recorded in 1997/98.
A spokesman for BNFL said the company could not comment on market speculation.
Join our commenting forum
Join thought-provoking conversations, follow other Independent readers and see their replies
Comments