Japan's Toshiba Corp. said on Wednesday it would take a 77 percent stake in Westinghouse, British Nuclear Fuels' U.S. power plant unit, for $4.16 billion, buying a much bigger chunk of the firm than it had initially planned.
Toshiba in February agreed to buy Westinghouse for $5.4 billion. The electronics maker then said it was in talks with five or six companies about taking a minority stake, and that Toshiba's stake in Westinghouse was likely to be 51 percent or a few percentage points more.
The Tokyo-based company added on Wednesday that U.S. engineering firm Shaw Group Inc. will take a 20 percent stake, while Ishikawajima-Harima Heavy Industries Co. Ltd. is set to take the remaining 3 percent.
Toshiba will turn to bank borrowings for the deal, which is slated to close by the end of the month, and has no plans for equity financing, a Toshiba spokesman said.
Toshiba's stake in Westinghouse could become smaller than 77 percent in the future as it is still negotiating with a few companies for a minority stake in the firm, the spokesman said.
Nuclear power was out of favor after the Chernobyl disaster in 1986, and the industry has been dogged by concerns about the financial and environmental costs of dealing with radioactive waste. But it has recently returned to the fore.
Concern over the security of power supplies and growing demand worldwide for energy have fueled a surge in crude oil prices, prompting fuel-hungry countries such as China to expand investment in other energy sources including nuclear power.
Toshiba, the world's fourth-largest microchip maker, is also investing heavily to ramp up capacity to make NAND-type flash memory chips, and the Westinghouse purchase has raised concerns that the company might be spreading its resources too thin.
Prior to the announcement, shares in Toshiba closed down 1.2 percent at 763 yen, roughly in line with the Tokyo stock market's electrical machinery index.