Alliance to Compete for New Reactor Projects, Expand Plant Services
ATLANTA -- GE and Hitachi, Ltd. have today completed the first half of their agreement to form a global alliance of their nuclear businesses, creating one of the world's most comprehensive nuclear power plant and services operations that will compete for new reactor projects around the world.
The global business that will operate throughout the world, excluding Japan, is called "GE-Hitachi Nuclear Energy" and officially began business today. It is 60% owned by GE and 40% by Hitachi, and will be led by the executives of GE's current nuclear business.
In Japan, the business is planning to begin operations in early July and will be called "Hitachi-GE Nuclear Energy." It will be owned 80.01% by Hitachi and 19.99% by GE and will be led by the executives of Hitachi's current nuclear business. All entities will share a joint advisory committee.
With climate change and energy security concerns driving a global resurgence in support for nuclear energy, GE and Hitachi are combining their nuclear businesses to become the world's foremost provider of advanced boiling water reactor (BWR) plants and related services. The newly allied businesses will also offer key equipment and services for pressurized water reactors (PWRs), another light-water reactor design popular in certain countries.
"Our new alliance complements and optimizes GE's and Hitachi's respective strengths, allowing us to offer customers a broader portfolio of technology and services backed by the industry's most extensive and experienced advanced reactor project development supply chain," said John Krenicki, president and CEO of GE Energy.
In an industry where a single reactor project can require an investment of several billion dollars, GE's and Hitachi's newly allied nuclear businesses will offer customers and investors even greater confidence that projects can be delivered on time and on budget.
"By strengthening our existing businesses and positioning our alliance for growth, the breadth of our combined capabilities and experience will be even more impressive in an extremely competitive global nuclear marketplace," said Akira Maru, president and CEO, Power Systems Group, Hitachi, Ltd.
The two companies have collaborated for decades in developing reactor projects. Since the 1980s, GE and Hitachi have worked together in developing Advanced Boiling Water Reactors (ABWRs) in Asia, a design that represents the world's only commercially proven Generation III reactor design.
GE and Hitachi partnered on building the first ABWR units to enter service in the mid 1990s, with Hitachi serving as a key provider of critical components and utilizing the ABWR design for additional new build projects in Japan. There are four ABWRs currently operating in Japan and several more being built in Asia, further honing GE's and Hitachi's joint reactor project capabilities.
Under their new alliance, GE and Hitachi will execute a single strategic vision to create a broader portfolio of industry solutions, an improved capacity for "new-build" opportunities, and the assets required to invest in and expand the allied businesses.
"While GE and Hitachi have collaborated for decades in developing advanced BWR projects, there are relatively few overlapping areas in our respective nuclear businesses," said Andy White, president and CEO of GE-Hitachi Nuclear Energy. "As a result, this model will enable us to quickly capitalize on critical business synergies that will add value for our customers around the world."
GE and Hitachi are already two of the three owners of the Global Nuclear Fuel (GNF) joint venture, one of the world's largest nuclear fuel assembly providers. GNF remains a separate business entity from the newly created alliance.
Based in Wilmington, N.C., GE's nuclear business, a part of GE Energy, recently marked its 50th anniversary in the nuclear industry.
About GE Energy
GE Energy (NYSE: GE) (www.ge.com/energy) is one of the world's leading suppliers of power generation and energy delivery technologies, with 2006 revenue of $19 billion. Based in Atlanta, Georgia, GE Energy works in all areas of the energy industry including coal, oil, natural gas and nuclear energy; renewable resources such as water, wind, solar and biogas; and other alternative fuels.
About Hitachi
Hitachi, Ltd., (NYSE: HIT / TSE: 6501), headquartered in Tokyo, Japan, is a leading global electronics company with approximately 384,000 employees worldwide. Fiscal 2006 (ended March 31, 2007) consolidated revenues totaled 10,247 billion yen ($86.8 billion). The company offers a wide range of systems, products and services in market sectors including information systems, electronic devices, power and industrial systems, consumer products, materials and financial services. For more information on Hitachi, please visit the company's website at http://www.hitachi.com.
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