Westinghouse being sold for $4.6 billion; impact on Western Pennsylvania unclear
Westinghouse Electric will be sold to Brookfield Business Partners LP in a deal valued at about $4.6 billion.
Westinghouse, with its headquarters in Cranberry and facilities scattered throughout Western Pennsylvania, declared bankruptcy in March, leaving thousands of jobs and the state of nuclear power in the United States in limbo.
Cyrus Madon, CEO of Toronto-based Brookfield, said in a statement he hopes the firm will strengthen Westinghouse. Madon called Westinghouse a “high business” and a “leader in its field” and said the company has a “reputation for innovation.”
“We look forward to bringing our significant expertise and reputation as a long-term owner and operator of critical infrastructure in the U.S. 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.”
José Emeterio Gutiérrez, president and CEO of Westinghouse, appeared optimistic about the future of the company under Brookfield.
“Brookfield's acquisition of Westinghouse reaffirms our position as the leader of the global nuclear industry,” Gutiérrez said in a statement. “Our transformation and strategic restructuring process is creating a stronger, stable and more streamlined global Westinghouse business, for the benefit of our customers and employees.”
Westinghouse, the U.S. nuclear unit of Toshiba, said Thursday the transaction doesn't involve cash but includes the assumption of a number of pension, environmental and operating obligations.
The deal is expected to close in the third quarter of 2018. It still requires bankruptcy court approval.
What impact the deal will have on Westinghouse properties, operations and employees in Western Pennsylvania was not immediately clear. Sarah Cassella, a spokeswoman for Westinghouse, said Thursday there will be no additional layoffs because of the sale and that the company does not anticipate further cuts after the sale is complete. Westinghouse employs about 3,400 people in Western Pennsylvania, down more than a thousand from the 4,500 it employed in March when the company announced its bankruptcy.
Westinghouse announced in September it would layoff up to 1,500 people.
Westinghouse did not immediately answer questions about the fate of its Cranberry headquarters. The company put some office space on the market in December.
“Over the last several months, we have focused on optimizing the use of our real estate properties globally, allowing our businesses to operate more efficiently,” the company said in a statement.
Cranberry Township Manager Jerry Andree said news of the sale is a good sign.
“We see this is a very positive step for Westinghouse, and we're confident it will help keep Westinghouse in Western PA,” he said.
Westinghouse also was in talks with the Westmoreland County Industrial Development Corp. to sell some of its land at Waltz Mill in Sewickley Township, Westmoreland County. It is not yet known if Westinghouse's sale to Brookfield would affect that deal.
Brookfield would not comment Thursday on the fate of the Cranberry headquarters or whether there would be additional layoffs.
Westinghouse said it will continue to operate and maintain its existing senior management throughout the process of the sale.
The acquisition by Brookfield comes one day after an agreement that ties up loose ends from two failed nuclear reactors in South Carolina.
South Carolina Electric & Gas Co. abandoned construction on reactors at the V.C. Summer Nuclear Station. Thousands were left jobless in the wake of the $9 billion failure, which owners blamed on the plight of Westinghouse, the lead contractor. A deal proposed Wednesday could mean $1.3 billion in refunds for utility customers affected by the failed project.
The nuclear industry has struggled because of the tremendous cost of building massive reactors and the accelerating shift to other forms of energy such as natural gas and alternative energy, including solar. The industry, and Toshiba in particular, has been subjected to tighter regulatory control since the 2011 Fukushima nuclear disaster in northeastern Japan.
Toshiba has been dumping assets to cover for its disastrous immersion into nuclear power, a play it once saw as a safe infrastructure investment, free of the seasonal fluctuations of the power generation industry.
Technology in fracking, a form of drilling, and alternative energy has upended the power sector.