Hitachi, GE in talks to combine nuclear power JVs: Nikkei
(Reuters) - Hitachi Ltd (6501.T) and General Electric Co (GE.N) are considering combining their two nuclear power joint ventures under a single entity which may end up under Hitachi's control, the Nikkei business daily said.
The move comes after a dip in demand for new nuclear plants in the context of a sharp rise in shale gas production in North America and the meltdown of Japan's Fukushima reactor last year, the paper said.
GE is one of the world's top power generation engineering companies and, together with Japan's largest industrial electronics maker Hitachi, is active in designing and building nuclear reactors.
The two had, in 2007, decided to set up two joint ventures, one in Japan and one in the United States, to tap the domestic and global markets, the daily said.
According to the Nikkei, the U.S.-based business, owned 60 percent by GE, has not been able to tap the global markets as envisioned, while the Hitachi-controlled Japanese venture has seen a rise in international orders.
The Japanese venture was initially supposed to be in charge of the domestic market, the paper said.
The initial framework has become less practical, the Nikkei said, prompting the two companies to consider consolidating the joint ventures.
To increase business efficiency, "we're talking with GE about improving our relationship, including consolidating the joint ventures," Hitachi President Hiroaki Nakanishi told The Nikkei in an interview.
If they are consolidated, he hinted, Hitachi would be in control of the combined entity, the paper added.
(Reporting By Aurindom Mukherjee in Bangalore; Editing by Sreejiraj Eluvangal)
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