Brookfield to buy Westinghouse from Toshiba

Westinghouse filed for bankruptcy in March of last year after project delays resulted in a series of write-downs. The scale of the problems threatened Toshiba itself, causing the company’s net losses to reach JPY966 billion ($8.5 billion) for the year ended March 2017, up from JPY460 billion 12 months’ earlier.

Brookfield Business Partners, a listed subsidiary of Brookfield, will contribute approximately half of the $1 billion equity with the remainder coming from a syndicate of institutional investors. The deal – which is expected to close in the third quarter of 2018 – also includes around $3 billion in debt financing and the assumption of certain pension, environmental and other operating obligations.

Competing bids for the asset were submitted by Cerberus Capital Management and a consortium comprising The Blackstone Group and Apollo Global Management, Bloomberg reported.

Westinghouse was acquired by Toshiba in 2006 for $5.4 billion with a view to diversifying the conglomerate’s business interests. It offers engineering, maintenance, facilities management, and repair services to a global customer base, primarily through long-term contracts. The company claims to be the world’s largest service provider to nuclear power facilities.

Westinghouse struggled to deliver the expected number of projects due to changes in the nuclear industry. Brookfield will buy the company’s remaining US assets out of bankruptcy as well as the Europe, Middle East, and Africa units, which remained outside bankruptcy protection.

“We look forward to bringing our significant expertise and reputation as a long-term owner and operator of critical infrastructure in the US and globally, as well as our deep facilities management capabilities, to enhance the company’s position as a leading global infrastructure services provider to the power generation industry,” Cyrus Madon, CEO of Brookfield Business Partners, said in a statement.

Brookfield has more than $265 billion of assets under management, of which approximately $141 billion are in the US. Recent Asia-related activity includes the acquisition of two energy platforms operated by SunEdison. One of them, TerraForm Global, has more than half its total capacity in China, India, Thailand, and Malaysia.

The problems at Westinghouse have also facilitated the sale of Toshiba Memory Corporation to a consortium led by Bain Capital for JPY2 trillion. Toshiba needed the proceeds from the sale to cover the Westinghouse losses and avoid being delisted from the Tokyo Stock Exchange.

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• Topics
• North Asia
• Buyouts
• Infrastructure
• Infrastructure
• Japan
• Brookfield Asset Management
• energy