Japan's Hitachi buys UK's Horizon nuclear project

LONDON/TOKYO Tue Oct 30, 2012 4:55am EDT

A man walks past Hitachi's booth at CEATEC JAPAN 2012 electronics show in Chiba, east of Tokyo, October 2, 2012. REUTERS/Yuriko Nakao

A man walks past Hitachi's booth at CEATEC JAPAN 2012 electronics show in Chiba, east of Tokyo, October 2, 2012.

Credit: Reuters/Yuriko Nakao

LONDON/TOKYO (Reuters) - Japanese industrial electronics maker Hitachi (6501.T) is taking over Britain's Horizon nuclear project to build four to six new nuclear power stations, the UK's Department of Energy and Climate Change (DECC) said on Tuesday.

Hitachi said that it expected to complete the deal at the end of November and that it hoped to have the first 1,300 megawatt (MW) nuclear power plant operational by the mid-2020s.

"The Hitachi Horizon programme involves building two to three 1,300 MW plants at each of Horizon's sites at Wylfa, Anglesey, and Oldbury, Gloucestershire, with the first unit becoming operational in the first half of (the) 2020s," Hitachi said in a statement.

DECC said that, once completed, Horizon's four to six nuclear power plants could provide up to 14 million homes with electricity for over 60 years.

"This is a decades-long, multi-billion pound vote of confidence in the UK, that will contribute vital new infrastructure to power our economy," British Prime Minister David Cameron said.

UK COMPANIES JOIN HITACHI

Hitachi said that British companies Babcock International and Rolls-Royce had signed a memorandum of understanding (MOU) to join Hitachi in Horizon.

"Hitachi's takeover of Horizon could provide the jump-start needed to get this long anticipated project finally moving," Edison Investment Research said.

Hitachi, which earns just under 10 percent of its overall sales from its power systems segment, formally agreed on the purchase at a board meeting on Tuesday.

Hitachi is paying 696 million pounds ($1.12 billion) for Horizon, which it is buying from German utilities E.ON (EONGn.DE) and RWE (RWEG.DE).

The German companies formed the Horizon Nuclear Power joint venture in 2009 but decided to sell following Germany's nuclear exit after Japan's Fukushima nuclear accident in 2011.

Hitachi said it expected over 60 percent of the value chain of its British nuclear power plants to be spent on local materials, personnel and services.

"Hitachi will make significant investment in training engineers, construction teams and operating staff, and it will work with local partners to develop training programmes which will create a strong and permanent base of nuclear skills in the UK," Hitachi said.

($1 = 0.6241 British pounds)

(Additional reporting by by Maria Sheahan in Berlin; Editing by Mark Potter and David Cowell)

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