Friday, March 31, 2017

A really bad bet

Toshiba's Westinghouse Electric is filing for bankruptcy

The company bet big on the nuclear industry in 2006, acquiring Westinghouse for $5.4 billion. It was a bold deal that came at a time of renewed interest in nuclear power.

But the meltdown at Japan's Fukushima Daiichi nuclear power plant in 2011 changed things. 

In the face of souring public opinion on nuclear energy and stricter safety requirements, hopes of a nuclear renaissance soon faded.

Analysts said Toshiba paid too much for Westinghouse, forcing it to maintain an aggressive nuclear power plant sales forecast. 

That led to Westinghouse acquiring nuclear construction business CB&I Stone & Webster in 2015.

The deal was supposed to help Westinghouse complete the U.S. reactor projects. 

Instead, costs spiraled out of control. 

Toshiba later admitted that it may have overestimated the value of CB&I Stone & Webster.

No comments:

Post a Comment