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Westinghouse agrees to acquisition

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Westinghouse Electric Co., the contractor in the abandoned V.C. Summer nuclear project, has agreed to be acquired by Brookfield Business Partners L.P. for approximately $4.6 billion.

The purchase price for substantially all of the global nuclear technology, fuel and services business of Westinghouse excludes cash and includes the assumption of certain pension, environmental and other obligations, the company said.

The acquisition, subject to bankruptcy court and regulatory approval, is expected to close in the third quarter. Westinghouse will continue to operate under its existing senior management during that process.

Brookfield is a global acquisition firm with assets including real estate and renewable power. It has a large portfolio of office properties and infrastructure business, with an objective, according to its website, "to generate long-term returns of at least 15% on its investments."

“Brookfield’s acquisition of Westinghouse reaffirms our position as the leader of the global nuclear industry,” Westinghouse President and CEO Jose Emeterio Gutierrez said in a news release. “Our transformation and strategic restructuring process is creating a stronger, stable and more streamlined global Westinghouse business for the benefit of our customers and employees.” 

PJT Partners is the financial adviser to Westinghouse. Weil, Gotshal & Manges LLP is Westinghouse’s legal counsel, and AlixPartners LLP is Westinghouse’s turnaround consultant in its ongoing reorganization.

Westinghouse’s bankruptcy declaration in April led to the abandonment of twin nuclear reactors being constructed at the V.C. Summer nuclear power plant located near Jenkinsville. Soon after that filing, project co-owners S.C. Electric & Gas and Santee Cooper pulled out of the project, after having sunk a combined $9 billion into its decade-long construction.

SCE&G parent company SCANA is set to be acquired by Virginia-based Dominion Energy in a $14.6 billion deal announced Wednesday. Residential SCE&G customers, who have paid $1.8 billion in higher rates toward the nuclear project and are still paying $27 a month, could receive up to $1,000 as part of a $1.3 billion cash payment within 90 days of the completion of the stock-for-stock merger. Dominion would work with state regulators to determine refund amounts based on usage.

That merger is also expected to take effect by the third quarter and is subject to federal regulatory approval as well as approval by SCANA shareholders.

Westinghouse has been an acquisition target for months. In September, private equity firms Blackstone Group L.P. and Apollo Global Management teamed up to bid for its business.

Westinghouse’s troubles have contributed to struggles by its parent company, Toshiba, in the nuclear power industry. The Japanese conglomerate, which had agreed to cover V.C. Summer cost overruns, negotiated a settlement July to cap its liability at $2.2 billion, to be paid over a five-year period. SCANA and state-owned Santee Cooper sold the monetary rights to that settlement claim to Citibank in September for an immediate payout that netted SCANA $1.02 billion and Santee Cooper $831.2 million.

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