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Toshiba shares plunge on Westinghouse deal costs

Toshiba shares plunge on Westinghouse deal costs

Toshiba Corp.'s shares plunged more than 5 percent Thursday on news the company will shoulder a larger-than-expected cost in its acquisition of the U.S. maker of atomic power plant equipment, Westinghouse Electric Co.
The Japanese electronics company said Wednesday that Ishikawajima-Harima Heavy Industries Co. and the Shaw Group Inc. of the U.S. will be partnering with Toshiba to complete the acquisition of the company from its parent, British Nuclear Fuels PLC.
But trading house Marubeni Corp. decided to withdraw from the group, increasing Toshiba's stake to 77 percent from about 51 percent initially expected. That boosts its burden by roughly US$1.355 billion (euro1.07 billion) to US$4.158 billion (euro3.28 billion).
Toshiba has said it will continue to seek business partners to lessen its investment risk, but the news put pressure on the company's shares, which plunged 5.24 percent to 723 yen (US$6.13; euro4.83) Thursday on the Tokyo Stock Exchange.
BNFL agreed in February to sell its Westinghouse operations, along with its U.S. unit, BNFL USA Group, to Toshiba for US$5.4 billion (euro4.26 billion).
Toshiba is a leading supplier of nuclear power plants in Japan, with a 35 percent share of generation capacity. The Westinghouse deal means Toshiba will gain a 28 percent share of the global market, according to the company.


Updated : 2021-06-25 01:19 GMT+08:00