GE, Hitachi Join Forces to Strengthen Presence in Growing Nuclear Energy Market

Energy Resource, Nov 13, 2006

ENERGY RESOURCE-13 November 2006-GE, Hitachi Join Forces to Strengthen Presence in Growing Nuclear Energy Market(C)2006 JeraOne - http://www.jeraone.com

GE and Hitachi Ltd. today announced plans to discuss the formation of a global alliance aimed at strengthening their presence in the growing nuclear energy market.

The alliance, which would combine their new nuclear power plant and services businesses, will proceed through a cross-shareholding arrangement under which Hitachi will take a 40% holding in GE's existing nuclear business and GE will take approximately 20% holding in Hitachi's existing nuclear business.

The parties anticipate that the transaction will be completed in the first half of 2007, subject to all required approvals and negotiation of the definitive agreement.

Within the new alliance GE and Hitachi said they will execute "a single strategic vision" that will create a broader portfolio of industry solutions, an improved capacity for new build opportunities, and the assets to invest and grow the business. GE and Hitachi believe that this will enable improved customer service and support.

"This is truly a historic moment for our two companies," said GE Energy President and CEO John Krenicki. "Each business is contributing its existing nuclear power plant technology and service resources and assets to create a new alliance that will be the most comprehensive BWR technology and service provider in the world."

The two say the move will strengthen GE and Hitachi's existing boiling water reactor (BWR) capabilities in the light water reactor industry, while positioning the alliance for expansion into new nuclear energy segments and technologies. Potential areas of investment include new infrastructure, advanced reactor design, and service technology, with a focus on new opportunities across the industry value chain.

"By taking this bold step together, GE and Hitachi are ensuring that both companies will be strongly positioned to compete effectively and grow in a sector worth billions of dollars," Krenicki said.

"Hitachi and GE are recognized world leaders in innovation," said Hitachi Power Systems CEO, Akira Maru. "Hitachi believes that close liaison with GE is essential for expanding the BWR business both in Japan and globally. Based on this thinking, Hitachi has embraced a business strategy that emphasizes cooperation with GE. This alliance will forge a new model of industrial excellence that complements our respective strengths in the nuclear industry."

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