A plan by the South Korean and U.S. governments to jointly acquire a controlling 51% stake in Westinghouse Electric Co. (WEC) has collapsed after opposition from the reactor maker's largest shareholder. The two sides had gone as far as discussing how to split the stake evenly between them, but with the buyout off the table, Korea's likely holding has now been scaled back to between 5% and 10%.
According to political sources on the 22nd, the government told a closed-door plenary session of the National Assembly's Trade, Industry, Energy, SMEs and Startups Committee that it had received a proposal from Washington to jointly buy the 51% stake in WEC.
Canadian private equity firm Brookfield currently owns 51% of WEC, with Canadian uranium producer Cameco holding the remaining 49%. The two governments had planned to buy out Brookfield's entire 51% holding and become joint largest shareholders, according to sources. Talks reportedly went as far as specific formulas for dividing the stake, including splitting the 51% between the two countries in roughly equal portions.
The joint acquisition plan failed to clear Brookfield, which strongly opposed selling its stake, sources said. WEC itself was also reluctant to see the Korean side take a large holding that would give it a say in the company's business direction and key decisions.
With the bid for management control off, the government has lowered its target to a 5% to 10% stake as a realistic alternative and is continuing negotiations. Even at a single-digit level, the aim is to secure rights that allow Korea to have a voice rather than act as a purely financial investor. A committee official said the 5% to 10% stake under negotiation consists of common shares carrying voting rights.
Funding for the WEC stake will be raised separately from the $200 billion strategic investment package for the United States. Rather than having the government take the lead directly, the plan is for domestic nuclear power companies and private capital to participate together. Options under review include minimizing bond issuance by Korea Hydro & Nuclear Power and Korea Electric Power Corp. and instead raising money through private funds tied to the nuclear industry.
