Hitachi near $629 m British nuclear project deal

Hitachi Ltd, Japan’s largest industrial electronics maker, is close to buying British nuclear new-build project Horizon in a deal expected to be worth more than 50 billion yen ($628.46 million), Japanese media said on Saturday.

Horizon, which plans to build 6 gigawatts of nuclear capacity, was put up for sale by its German owners E.ON AG and RWE AG in March, as Germany’s decision to pull out of nuclear power hurt the utilities’ finances.

“Hitachi has made the best offer and has a good chance to get Horizon,” a source inside the consortium familiar with the process told Reuters, speaking on condition of anonymity. Another person with knowledge of the proceedings also said Hitachi was likely to be the winner.

Hitachi is expected to hold a board meeting on Tuesday to approve the deal and officially announce it later that day, both the Asahi daily newspaper and Kyodo newswire reported, citing sources familiar with the matter.

Another newspaper, the Mainichi daily, reported that in addition to building the nuclear units, Hitachi is also expected to win a contract for about 40 years to operate and maintain the reactors.

Hitachi officials were not immediately available to comment on the report.

Officials at E.ON and Horizon declined to comment, while a RWE spokesman said: “We are in the final stages. We will probably say more in the coming days.”

On Thursday, a RWE said it was in advanced talks to sell Horizon, after a German newspaper reported that a consortium led by Hitachi was the front runner for the Gloucester-based venture.

Hitachi, along with Canadian counterparty SNC-Lavalin , and Westinghouse plus its parent company Toshiba Corp , have both made bids for Horizon, a source with direct knowledge of the matter said earlier this month.

In early October, France’s Areva dropped out of the race to buy Horizon after earlier announcing it was bidding with China Guangdong Nuclear Power Holding.

E.ON and RWE, which are both the focus of ratings agencies with debts of about 41 billion euros ($53.02 billion) and 34 billion euros respectively, each paid about 250 million euros for Horizon’s two nuclear sites, at Oldbury near Bristol and Wylfa on Anglesey.

The two electricity companies have been under pressure since last year when Germany announced its intention to end nuclear energy use by 2022.

The British government plans huge growth in its nuclear industry, with new power stations expected to come on line by 2025 to replace ageing plants, but it has faced various stumbling blocks, including the Fukushima nuclear crisis delaying licensing and making projects more costly.

Hitachi, which has two nuclear power joint ventures with U.S.-based General Electric Co and earns just under 10 percent of revenues from its power systems segment, is slated to release financial results on Tuesday.