Toshiba acquires 50% of nuclear power generator NuGeneration

Toshiba

Toshiba acquires 50% of NuGeneration for UKL 85 million

NuGeneration acquires 50% stake in NuGeneration from Spain’s Iberdola

In December 2013, Toshiba purchased 50% of NuGeneration Ltd from Iberdrola (of Spain) for UKL 85 million (US$ 146 million), making NuGeneration a 50%/50% joint venture between Toshiba and GDF Suez.

NuGeneration Ltd (NuGen)

NuGeneration Ltd. (NuGen) owns an option to purchase the 190 hectare Moorside site, located to the north of Sellafield, from the UK Nuclear Decommissioning Agency.

NuGeneration plans to build a 3.4 GigaWatt nuclear power station using three AP1000 reactors built by Westinghouse. Westinghouse is owned by Toshiba (87%), by Kazakhstan based Uranium and nuclear fuel producer KazAtomProm (10%) and the Japanese engineering company IHI (3%).

When finished, NuGeneration’s Moorside nuclear power plant is expected to deliver about 7% of UK’s electricity.

Two factors drive Toshiba to acquire a 50% share of NuGeneration (NuGen):

  1. the great uncertainty of the future of nuclear power in Japan following the Fukushima nuclear accident
  2. Toshiba’s commitment to nuclear power – and dependence on nuclear power construction following the acquisition of the majority of Westinghouse

Japanese investments in UK nuclear power generation

Toshiba’s investment in NuGeneration is the second large Japanese investment in UK nuclear power generation, following Hitachi’s acquisition of Horizon Nuclear Power from Germany’s RWE and EON Ag.

While Germany has decided to exit nuclear power with the “Energiewende”, the future of nuclear power in Japan is unclear – unlike in Germany, at the moment all Japanese nuclear power stations are switched off.

Interestingly Japanese and German companies react in opposite ways regarding the future of nuclear energy: German companies RWE and EON AG exit nuclear energy, while Toshiba and Hitachi grasp the opportunities and acquire nuclear power planning companies NuGen and Horizon Nuclear Power.

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Japanese insurance SOMPO acquires UK reinsurer Canopius Group Ltd

Japanese insurance SOMPO part of NKSJ Holdings acquires UK reinsurer Canopius Group from Bregal Capital

In order to globalize, Japanese insurance company Sompo Japan (株式会社損害保険ジャパン), part of the insurance group NKSJ Holdings (NKSJホールディングス株式会社, TSE / JPX: No. 8630) announced yesterday the acquisition of 100% of the UK re-insurer Canopius Group Limited, operating on Lloyd’s for UKL 594 million (US$ 972 million), from the current owners. Current majority owner of Canopius is Bregal Capital.

Canopius will keep the brand, company name, and management team.

Canopius: one of the top ten insurers on the Lloyd’s market

Canopius, is an insurance group, one of the top ten insurers in the Lloyd’s market, was founded in December 2003, almost exactly ten years ago, via a Management Buy-Out (MBO) with UKL 25 million capital, which grew about twenty-fold to about UKL 500 million today, and today has about 560 employees.

Canopius is named after Nathaniel Canopius, native of Crete, who studied at Balliol College, Oxford, apparently introduced coffee drinking to Oxford around 1637 (according to the Canopius website), and later became Archbishop of Smyrna (Source: “Anglicans and Orthodox, Unity and Subversion, 1559-1725”, by Judith Pinnington, 2003, ISBN 0-85244-577-6, page 15).

Sources: press announcements by the companies, websites.

Japan to EU investment trend

While European investments in Japan are steady, Japanese corporations are investing heavily in Europe, approximately EURO 10 billion per year, in order to globalize and to expand their global foot print, and to acquire new know-how, which is clearly both the case here.

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Closing the gap: trade between EU and Japan is now balanced

Combining the amounts of trade for merchandise and commercial services, EU exports to Japan and Japanese exports to EU have reached equal levels, so that the trade between EU and Japan is now balanced around EURO 80 billion in each direction, i.e. a combined trade of EURO 160 billion.

Japan is traditionally stronger in the expert of manufactured goods, while EU is stronger in the export of commercial services. Combining both merchandise and services, the trade between EU and Japan is now balanced.

Trade in goods plus services between EU and Japan
Trade in goods plus services between EU and Japan

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Japan’s direct investments in EU flourish, while EU investments in Japan stagnate

Japan to Europe direct investment: Japanese companies acquire EU companies for EURO 10 billion/year, total Japanese investments in EU are EURO 160 billion

Investment flow between EU and Japan shows strong impact from the Lehmann shock economic downturn. Investment flow from EU to Japan remains at relatively low levels around EURO 1 billion annually, while investments by Japanese companies in the EU are on the order of EURO 10 billion per year currently.

M&A and direct investment (FDI) transactions:

Foreign direct investment (FDI) flow between EU and Japan
Foreign direct investment (FDI) flow between EU and Japan

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EU Japan investment stock

EU Japan investments: European investments in Japan total about EURO 80 billion and are steady, while Japanese investments in EU increase rapidly

EU Japan investment stock

EU Japan investment: Foreign direct investment (FDI) stock between EU and Japan
Foreign direct investment (FDI) stock between EU and Japan

EU Japan investment: EU to Japan

EU to Japan investment register

EU investments in Japan have been relatively constant around EURO 80 billion. There has been a marked reduction in EU investment in Japan in 2006 due to the withdrawal of Vodafone from Japan with the sale of Vodafone KK to Softbank for approx. EURO 12 billion (find details of the Vodafone-SoftBank M&A transaction here). This reduction of EU investment stock in Japan is clearly visible in the graphics below in 2006 and 2007.

EU Japan investment: Japan to EU

Japan to EU investment register

Japanese investments in EU are steadily increasing, as Japanese companies are seeking to grow business outside Japan’s saturated market, and as Japanese companies acquire European companies for market access, technology and global business footprint. In 2012 the total investment stock of Japanese companies in the EU-27 has reached around EURO 150 billion.

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